On Wednesday, March arabica coffee (KCH26) closed down 1.80 cents (-0.52%), while January ICE robusta coffee (RMF26) increased by 42 cents (+1.06%). The fluctuations in coffee prices follow technical selling in arabica coffee after a brief recovery, while robusta prices were buoyed by strong supply outlooks, especially from Vietnam.
Key factors affecting coffee markets include severe flooding in Indonesia that may reduce arabica coffee exports by 15% in the 2025-26 season, impacting about one-third of the country’s arabica farms. Conversely, Brazil’s total coffee production is expected to increase by 2.4% to 56.54 million bags. In Vietnam, coffee exports have surged by 39% year-on-year, raising concerns of abundant robusta supplies as the country seeks to boost production to a four-year high of 1.76 million metric tons.
Global coffee exports are also under pressure, with the International Coffee Organization reporting a 0.3% decline year-on-year to 138.658 million bags for the current marketing year. The USDA forecasts world coffee production will rise by 2.0% to a record 178.848 million bags for 2025-26, driven by a projected decrease in arabica production and a significant rise in robusta output.
