**Coffee Prices Drop Amid Stronger Dollar and Supply Dynamics**
On March 23, 2023, coffee prices fell sharply, with May arabica coffee (KCK26) closing down 2.56% at -$7.80 and May ICE robusta coffee (RMK26) down 1.53% at -$54. The decline was driven by a recovering dollar index, leading to long liquidation in coffee futures. Current ICE robusta inventories shrank to a 1.25-year low of 3,867 lots, supporting prices somewhat amidst ongoing supply tightness.
Brazil is poised for a record coffee crop in 2026/27, with projections of 75.9 million bags by Marex Group Plc, up 15.5% year-over-year. However, recent data shows that Brazil’s March coffee exports fell 31% year-over-year to 151,000 metric tons, while below-average rainfall is expected to impact yields in prime growing regions like Minas Gerais. In contrast, Vietnam’s coffee exports are on the rise, with a 14% year-over-year increase for January to March 2026 exports, further pressuring robusta prices.
