On Wednesday, March arabica coffee (KCH26) closed down 1.33% at -4.70, marking a two-month low, while January ICE robusta coffee (RMF26) fell 3.46% to -136, reaching a four-month low. This decline is attributed to ample rainfall in Brazil’s coffee-growing regions, easing crop concerns, as reported by Climatempo, with Minas Gerais receiving 79.8 mm of rain, 155% of the historical average.
The Brazilian real dropped to a 4.25-month low against the dollar, bolstering export sales amid expectations of increased coffee supplies. Brazil’s 2025 total coffee production estimate was raised by 2.4% to 56.54 million bags. Additionally, Vietnam’s November coffee exports surged 39% year-on-year to 88,000 MT, contributing to downward pressure on coffee prices.
ICE-monitored arabica inventories have seen fluctuations, falling to a 1.75-year low of 398,645 bags on November 20 but recovering to 426,938 bags recently. U.S. purchases of Brazilian coffee dropped by 52% during high tariff periods but are expected to increase following tariff reductions, contrasting with Vietnam’s projected coffee production rise of 6% to 1.76 MMT for 2025/26.
