Tag: Arabica

Global Coffee Prices Rise as Roasters Step In After Recent Slump

Posted on by Qahwa World

Global coffee prices moved higher for a second consecutive session as bargain buying emerged after recent six-month lows. While Brazil and Vietnam are expected to expand production, tightening exports and shifting inventories are keeping the market balanced.

DUBAI – QAHWA WORLD

Global coffee markets extended gains for a second consecutive session on Friday, supported by renewed buying interest after prices recently fell to six-month lows.

March arabica futures (KCH26) closed up 0.40 cents (+0.13%), while March ICE robusta (RMH26) rose by $24 (+0.63%), with robusta touching a one-week high. The rebound follows a sharp two-week decline that pushed both contracts to six-month lows earlier in the week, encouraging roasters to rebuild inventories at more attractive price levels.

  • Domestic Market Remains Stable

While international prices moved higher, domestic coffee prices held steady at 96,400–97,700 VND per kilogram. The highest levels were recorded in Gia Lai and Dak Lak at 97,700 VND/kg, while Lam Dong posted the lowest at 96,400 VND/kg.

On the futures markets, London robusta contracts advanced across delivery months. The January 2026 contract rose by $24 to $3,859 per ton, and the November 2026 contract gained $46 to $3,584 per ton.

In New York, March 2026 arabica edged up 0.4 cents to 300.05 cents per pound, while the December 2026 contract climbed 0.85 cents to 286.40 cents per pound. Brazilian arabica futures showed mixed movement, with March down 4.6 cents to 384.0 cents per pound and May up 1.35 cents to 381.4 cents per pound.

  • Pressure from Expanding Supply

Despite the short-term recovery, coffee prices have faced sustained pressure from expectations of strong global supply.

Brazil’s crop forecasting agency, Conab, projected that Brazil’s 2026 coffee production will rise 17.2% year-on-year to a record 66.2 million bags, including a 23.2% increase in arabica output to 44.1 million bags and a 6.3% rise in robusta production to 22.1 million bags.

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Improved weather conditions have further eased supply concerns. According to Somar Meteorologia, Brazil’s key arabica-growing region of Minas Gerais received 72.6 mm of rainfall in the week ended February 6 — 113% of the historical average — reducing earlier drought worries.

Vietnam’s strong export performance has also weighed on robusta prices. The country’s National Statistics Office reported January coffee exports surged 38.3% year-on-year to 198,000 metric tons, while full-year 2025 exports rose 17.5% to 1.58 million metric tons. Vietnam’s 2025/26 coffee production is projected to increase 6% year-on-year to 1.76 million metric tons (29.4 million bags), marking a four-year high.

  • Inventory Recovery Adds Headwinds

The rebound in ICE-monitored inventories has also added downward pressure. Arabica stocks, after falling to a 1.75-year low of 396,513 bags in November, recovered to a 3.25-month high of 461,829 bags in early January. Robusta inventories similarly rebounded from a 13-month low in December to a two-month high by late January.

  • Supportive Factors Remain

On the supportive side, Brazil’s January coffee exports dropped 42.4% year-on-year to 141,000 metric tons, tightening short-term supply availability.

In Colombia, the world’s second-largest arabica producer, January coffee production fell 34% year-on-year to 893,000 bags, according to the National Federation of Coffee Growers.

The International Coffee Organization (ICO) reported that global coffee exports for the current October–September marketing year declined 0.3% year-on-year to 138.658 million bags, pointing to tighter trade flows.

Meanwhile, the USDA Foreign Agriculture Service (FAS) projected world coffee production in 2025/26 will increase 2.0% year-on-year to a record 178.848 million bags. Arabica output is expected to fall 4.7% to 95.515 million bags, while robusta production is forecast to rise 10.9% to 83.333 million bags. FAS estimates 2025/26 ending stocks will decline 5.4% to 20.148 million bags from 21.307 million bags in 2024/25.

  • Market Outlook

The market remains caught between short-term demand recovery and longer-term supply expansion. While bargain buying has lifted prices in recent sessions, forecasts for larger crops in Brazil and Vietnam continue to cap upside momentum.

Coffee Prices Rise as Brazilian Real Strength Sparks Short Covering

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DUBAI – QAHWA WORLD

Coffee futures climbed sharply on Thursday following a surge in the Brazilian real, which encouraged traders to cover short positions. March arabica contracts closed up 1.65%, while March robusta contracts rose 2.02%.

The real reached its highest level against the U.S. dollar in nearly two years, prompting caution among Brazilian coffee exporters and contributing to the price gains.

Over the past two weeks, coffee prices had been under pressure. Arabica and robusta recently hit six-month lows amid expectations of a strong Brazilian crop. According to Brazil’s crop agency Conab, total coffee production in 2026 is projected to reach 66.2 million bags, up 17.2% from 2025. Arabica output is expected to increase 23.2% to 44.1 million bags, while robusta production is forecast to grow 6.3% to 22.1 million bags.

Rainfall in Brazil has also improved crop prospects. Minas Gerais, the country’s largest arabica-growing region, received 72.6 mm of rain during the week ending February 6, exceeding the historical average. This eased earlier concerns over dry conditions that had pressured prices.

Vietnam’s coffee exports, particularly robusta, are increasing, exerting downward pressure on prices. January exports rose 38.3% year-on-year to 198,000 metric tons, while total 2025 exports climbed 17.5% to 1.58 million metric tons. Production for 2025/26 is projected at 1.76 million metric tons (29.4 million bags), the highest in four years.

ICE coffee inventories have also recovered, limiting price gains. Arabica stocks, which fell to a 1.75-year low in November, rose to a three-month high by early January. Robusta inventories, previously at a 13-month low in December, similarly increased in January.

On the upside, Brazil’s coffee exports fell 42.4% year-on-year in January, reducing global supply pressure. Smaller production in Colombia, the second-largest arabica producer, also supported prices, with January output down 34% year-on-year.

Globally, the International Coffee Organization reported a slight decline (-0.3%) in exports for the current marketing year, signaling tighter supplies. Meanwhile, USDA forecasts indicate that total global coffee production in 2025/26 will reach a record 178.848 million bags, with arabica slightly down and robusta up. Brazil’s 2025/26 production is expected to decrease by 3.1%, while Vietnam’s output is projected to rise 6.2%, reaching a four-year high. Ending stocks are forecast to decline by 5.4%.

Arabica Coffee Gains on Technical Support Amid Mixed Market Performance

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Dubai – Qahwa WORLD

March Arabica coffee (KCH26) concluded Monday’s session with a gain of +1.00 (+0.30%), while March ICE Robusta coffee (RMH26) saw a notable decline, closing down -84 (-2.04%) at a four-week low. The market showed a mixed performance as substantial rainfall in Brazil improved yield prospects but pressured prices. Somar Meteorologia reported that Minas Gerais, Brazil’s premier Arabica region, received 69.8 mm of rain during the week ending January 30, representing 117% of the historical average.

Further weighing on the market, Brazil’s crop agency, Conab, recently increased its 2025 total coffee production forecast by 2.4% to 56.54 million bags. Meanwhile, Robusta prices faced significant headwinds from surging exports in Vietnam, the world’s top Robusta producer. Official statistics from January 5 indicated a +17.5% year-over-year jump in Vietnamese coffee exports to 1.58 MMT. Production for the 2025/26 cycle in Vietnam is projected to rise +6% to 1.76 MMT, a four-year high, with Vicofa suggesting a potential 10% increase if weather remains favorable.

The recovery of ICE-monitored inventories has also exerted downward pressure on prices. Arabica stocks climbed to a 3.25-month high of 461,829 bags in early January, recovering from a multi-year low recorded in November. Similarly, Robusta inventories reached a two-month high of 4,662 lots last Monday. On the supportive side, Cecafe reported an -18.4% decline in Brazil’s December green coffee exports, with Arabica shipments down -10% and Robusta exports falling sharply by -61%.

Globally, the International Coffee Organization noted a marginal -0.3% decrease in exports for the current marketing year. However, the USDA’s Foreign Agriculture Service predicts record global production of 178.848 million bags for 2025/26, a +2.0% increase. This forecast anticipates a -4.7% drop in Arabica output alongside a +10.9% surge in Robusta production. Ending stocks for the 2025/26 period are expected to decline by -5.4% to 20.148 million bags.

Bridging the Gap: An Exclusive Dialogue with Vanusia Nogueira on the Global Coffee Crisis and the Path to 2026

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From regulatory hurdles like the EUDR to the volatile C-Market and climate resilience, the Director General of the International Coffee Organization (ICO) outlines a strategic roadmap for a fairer global coffee value chain.

Dubai – Ali Alzakary

The International Coffee Organization (ICO) is the primary intergovernmental body dedicated to fostering a sustainable coffee sector. At its helm stands Mrs. Vanusia Nogueira, a visionary leader whose tenure has been defined by a relentless pursuit of equity for smallholder farmers.

This exclusive interview marks a historic moment—the first dialogue granted by the Director General to an Arabic media outlet. We are profoundly grateful to Mrs. Nogueira for graciously accepting our invitation. Beyond her professional stature, her humility and the sincerity with which she approached this conversation were truly remarkable. In an industry often characterized by formal diplomacy, her transparency and candor provided a clear and honest look at the challenges facing our sector. We are deeply indebted to her for her time, her precision, and the kindness she showed throughout this significant exchange.

  • Now that we are well into 2026, how do you personally see the ICO’s role in helping smallholder farmers cope with regulations like the EUDR and other environmental requirements?

The ICO acts as a vital bridge between producing and consuming nations. With 75% to 80% of global coffee producers being smallholders, our role is to make policymakers understand the ground-level challenges. There is often a lot of good intentions behind regulations, but policymakers and consumers are often unaware of how difficult it is to comply in the field. We educate these stakeholders and bring together partners—governments, development agencies, and the industry—to provide the technical and financial support that vulnerable communities need to make these transitions feasible and viable.

  • Traceability and data systems are becoming unavoidable. How can we ensure these costs don’t end up being paid mainly by small farmers?

We are building partnerships with the consuming side—the industry and governments—to support the infrastructure needed, from geolocations to databases. In many countries, the key issue is internal infrastructure, such as internet access. We are working with partners like the German, UK, and Italian governments to implement these systems. Furthermore, we need to educate consumers on why it is fair to pay a little more. Transparency is essential; we must show that these margins are necessary for producers to survive and thrive.

  • Looking back at 2025, has the industry made progress toward a “living income,” or are we still stuck with the C-Market logic?

Vanusia Nogueira: The sector learned in the past two years that a living income is not just about price. It is about closing gaps in productivity, yield, and infrastructure like healthcare and education. While producers in some regions reached a comfortable level last year due to higher prices, others are still struggling. A key solution is for small producers to stop working in isolation; they must organize into cooperatives or associations to access new markets and technical assistance together.

  • Regarding the climate impact on specific origins—in Yemen, for example, the harvest has become fragmented into multiple stages and quantities are dropping. How do you view this?

The situation in Yemen—where you have three or four harvests from the same tree instead of one—is a clear symptom of climate change that we must analyze deeply. We have seen similar shifts in Brazil. We need to understand if the traditional varieties in Yemen—which is one of the original homes of Arabica—are still suitable for this new climate or if we need to renovate the plantations with more resilient strains. Yemen’s heritage is a global priority, and scientists must work to find solutions that protect its unique productivity.

  • There is a growing debate about responsibility. Are large roasters and traders doing enough today?

I see major roasters and traders working very closely with producing countries on “pre-competitive” actions to address these challenges. I am in constant contact with global industry leaders, and I am confident they are totally open to new solutions and are supporting the initiatives needed to stabilize the sector.

  • How should the sector approach lab-grown and alternative coffee products without losing the value of natural coffee?

Vanusia Nogueira: Communication and clarity are paramount. It must be clear to everyone what is “real coffee” and what is a substitute. Natural coffee has scientifically proven health benefits, whereas the impact of chemical or artificial alternatives is often unmentioned. In countries like Brazil and Vietnam, regulations already exist to ensure that packaging for substitutes cannot claim to be “coffee.” We must continue to express why natural coffee remains superior for health and culture.

  • Price swings have been extreme. What is actually driving this volatility?

It is a matter of a “short blanket”—supply and demand. Severe weather events since 2021—frosts in Brazil, droughts in Vietnam and Africa, and typhoons—have lowered production while consumption is surging, particularly in the Middle East and Asia. We are currently working with AI experts to create models that can better predict these events to help us protect production in the short and long term.

  • Markets like the Middle East are now shaping their own identities. How does the ICO plan to engage with them?

The Middle East is a driver of the industry. Saudi Arabia became an official member of the ICO six months ago, and I visited Riyadh recently to touch base with the situation there. I also heard incredible things about the “World of Coffee Dubai” event two weeks ago—people told me it was a truly “crazy” and amazing event. We need to be present in these markets, working as partners to improve communication and support these maturing consumer bases.

  • What role can consumer regions—including the Arab world—play in supporting producers beyond certifications?

The Arab world can play a strategic role as a “catalytic investor.” Beyond labels, their impact lies in investment, partnership, and system-building. They can help de-risk innovation and climate adaptation at the origin. By supporting logistics, research, and digital agriculture, they can help reshape how value and responsibility are shared across the sector.

  • If you could speak directly to the global sector in 2026, what would you say needs to change most urgently?

Vanusia Nogueira: What needs to change most urgently is how risk and value are distributed. Today, smallholders absorb most of the impact of price volatility and climate change. Coffee must be treated not just as a commodity, but as a global public good. If producers earn a prosperous income, the entire sector becomes resilient. That change cannot wait.

  • Editorial Highlights

“Coffee must be treated not just as a commodity, but as a global public good that supports livelihoods, ecosystems, and cultures.”

“Yemen is the cradle of Arabica; we must ensure that its historic coffee heritage survives the challenges of a changing climate.”

“The ‘World of Coffee Dubai’ was an amazing, high-energy event that proved the Arab world is now a central driver of the global coffee industry.”

“A living income is not just about prices—it is about productivity, healthcare, and education. Doubling prices is not enough if the foundation is missing.”

“We must be clear with consumers: natural coffee has scientifically proven health benefits that chemical substitutes simply cannot match.”

“The Arab world has the power to be a ‘catalytic investor,’ moving beyond labels to truly de-risk innovation at the origin.”

 

Brazil Rain and Vietnam Surplus Sink Coffee Futures

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NEW YORK — Qahwa World

Coffee futures saw a sharp downturn on Friday, with Arabica hitting a five-and-a-half-month low and Robusta dropping to a three-and-a-half-week trough. March Arabica (KCH26) finished the session down 13.25 cents (-3.845%), while March ICE Robusta (RMH26) fell by $66 (-1.58%).

The primary pressure stems from the weather outlook in South America. Forecasts now indicate consistent rainfall across Minas Gerais, Brazil’s premier growing region, for the upcoming week. This shift toward a more favorable moisture profile has dampened the recent rally.

Further bearish sentiment is driven by a bolstered supply outlook. On December 4, Brazil’s Conab increased its 2025 production forecast by 2.4%, now estimating a total of 56.54 million bags. Simultaneously, Vietnam—the world’s top Robusta producer—continues to flood the market. Vietnam’s National Statistics Office noted a 17.5% year-over-year surge in 2025 exports, totaling 1.58 million metric tons. Production for the 2025/26 cycle is expected to climb 6% to a four-year high of 29.4 million bags, with Vicofa suggesting output could rise by 10% if conditions remain optimal.

Market inventories are also seeing a notable recovery. ICE-monitored Arabica stocks rebounded from a nearly two-year low in November to reach 461,829 bags as of mid-January. Robusta stocks followed a similar path, recovering from a one-year low in December to reach a nearly two-month high of 4,609 lots this past Friday.

However, some factors continue to provide an underlying floor for prices. Cecafe reported a sharp 18.4% drop in Brazilian green coffee exports for December, with Robusta shipments specifically tanking by 61%. Furthermore, recent data from Somar Meteorologia highlighted that rainfall in Minas Gerais was recently only 53% of the historical average, while the ICO reported a slight 0.3% dip in global exports for the current marketing year.

Looking ahead, the USDA Foreign Agriculture Service (FAS) projects record global production of 178.848 million bags for 2025/26. While the agency expects a 4.7% dip in Arabica output, a projected 10.9% jump in Robusta production is set to offset those losses. Despite the record harvest, FAS anticipates ending stocks will tighten by 5.4% to roughly 20.15 million bags.

Coffee Prices Drop as Brazilian Real Weakens

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Dubai – Qahwa World

Coffee prices fell sharply on Wednesday after the Brazilian real lost some of its recent gains, prompting traders to liquidate long positions in coffee futures.

March Arabica (KCH26) closed down 16.25 points (-4.42%).

March Robusta (RMH26) fell 130 points (-3.04%).

Earlier in the session, Arabica had climbed to a two-and-a-half-week high, while Robusta reached a one-and-three-quarter-month peak before giving up gains. The weaker real makes Brazilian coffee more competitive for export, adding pressure on futures prices.

  • Key Factors Driving the Market

Supporting Prices:

Brazilian coffee exports declined in December by 18.4%, totaling 2.86 million bags, with Arabica down 10% and Robusta down 61% year-on-year.

Below-average rainfall in Minas Gerais, Brazil’s main Arabica region, has raised concerns about supply, as the area received just 33.9 mm of rain last week—around half the historical average.

Pressuring Prices:

ICE coffee inventories have recovered after hitting multi-year lows, which weighs on prices.

Vietnam, the world’s top Robusta producer, saw its 2025 exports jump 17.5% to 1.58 million metric tons, with production rising 6% year-on-year.

Global coffee supply forecasts show a modest increase in total production, with Arabica down and Robusta up, creating mixed signals for the market.

  • Market Outlook

Brazil’s 2025/26 production is projected to fall to 63 million bags, while Vietnam’s output is expected to rise to 30.8 million bags—a four-year high. Ending stocks for the season are forecasted to decline to 20.148 million bags, down 5.4% from the previous year, keeping supply concerns on traders’ radar.

Top Coffee-Producing Countries in 2025

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A Full Analytical Reading of the Global Production Landscape in Early 2026

Dubai – Qahwa Word

As January 2026 begins, the global coffee sector is closely monitoring the completion of data for the 2025/2026 season, amid an increasingly complex interaction between climate variability, logistical disruptions, and new environmental regulations. Estimates available at this stage suggest that global coffee production is trending toward approximately 178.8 million 60-kg bags.

These figures do not represent final season results, but rather an early analytical snapshot based on field assessments and reports from international organizations as of early 2026. The focus extends beyond volume alone, highlighting deeper structural shifts that are reshaping global coffee production, trade flows, and varietal balance.

1. Top Ten Coffee-Producing Countries

(Estimates as of January 2026)

Available data confirm the continued dominance of Brazil and Vietnam in global coffee supply, while several African and Latin American origins show notable developments in both volume and crop structure.

Rank Country Production (million bags) Dominant variety Production status – Jan 2026
1 Brazil 64.2 – 65.0 Arabica / Robusta Peak export phase; strong Conilon growth amid Arabica volatility
2 Vietnam 30.8 – 31.0 Robusta Production recovery supported by improved irrigation practices
3 Colombia 14.8 Arabica Stable washed coffee output due to regular rainfall
4 Ethiopia 11.6 Arabica Strong crop supported by long-term tree-renewal programs
5 Indonesia 11.2 Robusta / Arabica Visible recovery restoring competitive positioning
6 Uganda 6.9 Robusta Continued rise as Africa’s leading Robusta supplier
7 India 6.2 Robusta / Arabica Stable production serving both export and domestic markets
8 Honduras 5.5 Arabica Gradual recovery despite rising production and labor costs
9 Peru 4.2 Arabica Expansion in planted area and growing organic orientation
10 Mexico 3.9 Arabica Relative stability aimed at meeting regional demand

2. Land Efficiency and Yield Performance

Early 2026 data highlight a clear divergence in production efficiency among leading coffee origins:

  • Vietnam and Brazil continue to record the highest yields globally, with Vietnam reaching an estimated 2.5–3 tons per hectare, driven by intensive farming models, improved plant material, and higher input use.

  • By contrast, Ethiopia and Colombia, despite their premium quality profiles, maintain lower average yields due to mountainous terrain, fragmented landholdings, and reliance on traditional farming systems. This has become a focal point for research discussions around productivity gains without compromising origin identity or biodiversity.

3. Arabica–Robusta Balance: A Structural Shift

Indicators from January 2026 suggest that Robusta now accounts for nearly 42% of global coffee production, reflecting a structural realignment shaped by multiple converging forces:

  1. Climate resilience: Robusta has demonstrated stronger tolerance to rising temperatures and irregular rainfall compared to climate-sensitive Arabica.

  2. Premium Robusta development: An increasing number of roasters are incorporating higher-quality Robusta into blends to manage costs while preserving cup structure.

  3. Price divergence: Persistently elevated Arabica prices continue to accelerate the market’s gradual rebalancing toward Robusta, particularly in commercial segments.

4. Logistics and Shipping Constraints

At the start of 2026, coffee supply chains remain under pressure from logistical disruptions:

  • Rising freight costs, linked to instability in key maritime corridors, have reduced the competitiveness of Asian-origin coffee in European spot markets.

  • Low global inventories, relative to recent multi-year averages, leave prices highly sensitive to weather events, geopolitical developments, and supply-side news.

5. Regulatory Pressure and Environmental Compliance (EUDR)

With the effective implementation of the European Union Deforestation Regulation (EUDR) in 2026, environmental compliance has become a defining factor in global coffee trade:

  • European buyers increasingly require digital traceability systems and precise geospatial coordinates to demonstrate deforestation-free supply chains.

  • Brazil and Vietnam appear comparatively well positioned in terms of technical readiness, while origins dominated by smallholder farming face significant challenges in meeting traceability requirements—potentially redirecting exports toward non-European markets.

Conclusion

The global coffee production landscape in early 2026 reflects a period of transition and anticipation. Competitive advantage is no longer defined solely by production volume, but increasingly by environmental compliance, climate adaptability, and logistical efficiency. As the 2025/2026 harvest reaches completion in the coming months, clearer signals will emerge from a season likely to play a pivotal role in reshaping the global coffee market.

Chinese Scientists Discover New Health Benefits in Coffee Beans

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Dubai – Qahwa World

Researchers at the Chinese Academy of Sciences have identified previously unknown compounds in coffee beans that may slow glucose absorption and support carbohydrate metabolism. The study was conducted at the Academy’s Institute of Botany and published in Beverage Plant Research.

The focus of the research was the chemical composition of roasted Arabica beans. Using nuclear magnetic resonance, liquid chromatography, and mass spectrometry, scientists isolated three unique compounds, named Caffaldehydes A, B, and C.

Laboratory tests revealed that these compounds can inhibit the enzyme α-glucosidase, which plays a key role in carbohydrate breakdown and glucose absorption into the bloodstream. Limiting its activity helps prevent sharp spikes in blood sugar after meals.

When compared to acarbose, a medication commonly used to treat type 2 diabetes, the new compounds proved more effective. Researchers believe this discovery could lead to the development of functional foods and dietary supplements designed to help maintain stable blood sugar levels.

The scientists also cautioned that coffee has potential contraindications, and they recommend consulting a healthcare professional before consumption.

Coffee Prices Rise as Dollar Weakens

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Dubai – Qahwa World

Coffee futures ended higher on Friday, with robusta reaching a 1.5-month high, as the U.S. dollar fell to its lowest level in three and a half months. March arabica (KCH26) increased by 0.92%, while March robusta (RMH26) gained 2.88%. The weaker dollar prompted short-covering across commodities, including coffee.

Brazilian coffee exports have declined, supporting prices. Cecafe reported that December’s total green coffee exports fell 18.4% year-on-year to 2.86 million bags. Arabica shipments dropped 10% to 2.6 million bags, while robusta exports plunged 61% to 222,147 bags. Below-average rainfall in Minas Gerais, Brazil’s largest arabica-growing region, also added upward pressure, with Somar Meteorologia reporting only 33.9 mm of rain for the week ending January 16, just 53% of the historical average.

At the same time, inventories monitored by ICE have rebounded, putting some pressure on prices. Arabica stocks rose to a 2.5-month high of 461,829 bags, after reaching a 1.75-year low in November. Robusta inventories recovered to a 1.75-month high of 4,609 lots, following a 1-year low in December.

Global supply trends remain mixed. Brazil’s crop agency Conab raised its estimate for 2025 coffee production by 2.4% to 56.54 million bags. Vietnam, the world’s largest robusta producer, reported a 17.5% year-on-year increase in coffee exports for 2025, reaching 1.58 million metric tons. Its coffee output is projected to rise 6% to 29.4 million bags, marking a four-year high.

Overall, global coffee production is expected to grow, with USDA forecasts projecting a 2% increase in 2025/26 to a record 178.85 million bags. Arabica output is anticipated to fall 4.7% to 95.52 million bags, while robusta production is expected to climb 10.9% to 83.33 million bags. Brazil’s output is forecasted to decline 3.1% to 63 million bags, while Vietnam’s is projected to rise 6.2% to 30.8 million bags. Ending stocks are expected to drop 5.4% to 20.15 million bags.

The coffee market is navigating a mix of forces: a weaker dollar and tight Brazilian exports support prices, while recovering inventories and record Vietnamese production weigh on the market. Traders and industry observers will continue watching weather conditions, export flows, and inventory levels closely as the year progresses.

Coffee Prices Rise on Brazil Dryness and Global Supply Dynamics

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Dubai – Qahwa World

Coffee markets moved higher today amid ongoing concerns over dry conditions in Brazil, the world’s largest arabica producer. March arabica futures (KCH26) rose +4.20 (+1.18%), while March robusta futures (RMH26) gained +36 (+0.92%).

The price gains follow last week’s rally, when arabica hit a one-month high due to below-average rainfall in Brazil. Somar Meteorologia reported that Minas Gerais, Brazil’s primary arabica-growing region, received just 26.5 mm of rain for the week ending January 9—only 29% of the historical average—raising fears of smaller harvests.

  • Inventory Levels Support Prices

Tighter stock levels are adding upward pressure on coffee prices. ICE-tracked arabica inventories fell to a 1.75-year low of 398,645 bags on November 20 but rebounded to 461,829 bags last Wednesday. ICE robusta inventories hit a one-year low of 4,012 lots on December 10, later rising to a five-week high of 4,278 lots.

  • Vietnam Exports and Global Supply Trends

While Brazilian dryness is bullish, rising robusta exports from Vietnam are weighing on prices. Vietnam exported 1.58 million metric tons of coffee in 2025, up 17.5% from the previous year. Vietnam’s 2025/26 coffee production is expected to reach 1.76 million metric tons (29.4 million bags), a four-year high. The Vietnam Coffee and Cocoa Association noted that output could increase 10% over the prior year if favorable weather continues.

Globally, coffee supplies are showing mixed signals. The International Coffee Organization reported a slight year-on-year decline in exports for the current marketing year (October–September), totaling 138.658 million bags. Meanwhile, the USDA’s Foreign Agricultural Service (FAS) projects world coffee production in 2025/26 will hit a record 178.848 million bags, with arabica decreasing 4.7% to 95.515 million bags and robusta rising 10.9% to 83.333 million bags. Brazil’s production is expected to fall 3.1% to 63 million bags, while Vietnam’s output may climb 6.2% to 30.8 million bags. Ending stocks are projected to drop 5.4% to 20.148 million bags.

  • Outlook

Market watchers are balancing the bullish signals from Brazil’s dry weather and shrinking inventories against the bearish influence of rising Vietnamese supplies and higher global production forecasts. The net effect has been steady upward pressure on coffee prices, with both arabica and robusta futures posting notable gains in recent sessions.

ICO Releases Global Coffee Market Report – December 2025

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Dubai – Coffee World

The global coffee market closed 2025 amid sharp volatility, leaving industry stakeholders facing an uncertain outlook at the start of 2026, according to the latest report issued by the International Coffee Organization (ICO). The report highlights a dramatic shift in market dynamics during December, as prices declined significantly following changes in international policy and a temporary easing of supply chain constraints in Asia.

Price Decline: Market Correction or Calm Before the Storm?

The ICO Composite Indicator Price (I-CIP) averaged 304.68 US cents per pound in December, representing a 7.8% decline from November levels. This downturn ended a historic upward trend, with prices falling from a peak of 343.92 cents to a mid-month low of 283.21 cents, before closing the year at 293.09 cents per pound.

According to the report, the decline was driven by three key factors:

  • Improved supply expectations, as major international institutions revised global production estimates for 2025 upward, easing speculative pressure.

  • Reduced regulatory uncertainty, following the European Union’s decision to delay implementation of the EU Deforestation Regulation (EUDR), which curtailed panic buying.

  • Currency effects, as the depreciation of the Brazilian real encouraged producers to accelerate dollar-denominated sales to maximize local currency returns.

Group Performance: Robusta Suffers the Sharpest Losses

All coffee groups recorded price declines in December, with Robusta experiencing the steepest drop. Robusta prices fell 11.3% to 190.53 cents per pound.

In contrast, Arabica prices declined more moderately. Both Colombian Milds and Brazilian Naturals fell by 6.5%, reflecting continued underlying demand for higher-quality coffees despite broader market volatility.

Global Exports: Asia and Africa Lead Growth

Global green coffee exports increased by 4.8% in November 2025, reaching 8.95 million bags, according to ICO data.

  • Asia and Oceania recorded exceptional growth of 47%, driven by Vietnam’s strong return to the market, with exports rising by 60%.

  • Africa continued its positive trajectory, posting a 7.7% increase, led by Uganda, whose exports surged by 72%.

  • South America was the only region to register a decline, with exports falling 14.9%, reflecting a normalization after record shipments earlier in the year and a 25.8% drop in Brazilian Robusta exports.

Supply–Demand Balance: Structural Deficit Persists

Despite the recent price correction, the report underscores ongoing structural imbalances in the global coffee market. The cumulative supply deficit over recent years has reached 17.91 million bags, while inventories in Europe and the United States have fallen to historically low levels.

Certified stocks at the New York exchange declined to just 0.48 million bags, leaving the market with limited buffers against potential future supply shocks.

2026 Outlook: Climate Risks Shape the Path Ahead

As 2026 begins, attention is firmly focused on weather conditions across the world’s major coffee-growing regions. The report warns of below-average rainfall in Brazil’s key producing areas, including Minas Gerais, where precipitation reached only 76% of normal levels. Meanwhile, flooding in Indonesia could reduce exports by up to 15% in the first quarter of the new year.

Conclusion

The global coffee market ended 2025 with a price correction that may suggest temporary stability. However, a deeper analysis of the data points to a fragile equilibrium. Low global inventories and escalating climate risks indicate that 2026 is likely to be a year of significant challenges for both producers and consumers across the coffee value chain.

Coffee Prices Retreat as Stronger Dollar Triggers Selling

Posted on by Qahwa World

Dubai – Qahwa World

Coffee futures ended lower on Thursday after surrendering earlier gains, pressured by a strengthening U.S. dollar that prompted investors to reduce long positions.

March arabica coffee futures declined about 0.8%, while March robusta futures slipped slightly, losing roughly 0.3% by the close.

The pullback came as the U.S. Dollar Index climbed to its highest level in four weeks, making dollar-denominated commodities like coffee less attractive to buyers. This currency move outweighed earlier support that had pushed arabica prices to a one-month high.

Earlier in the session, coffee prices found strength from weather concerns in Brazil. Rainfall in key growing areas remained below normal, particularly in Minas Gerais, the country’s largest arabica-producing region. Weekly precipitation there reached just under two-thirds of the historical average, renewing worries about crop development.

Robusta prices, however, continued to face headwinds from expanding supplies in Vietnam. The country reported a sharp increase in coffee exports for 2025, reflecting strong output from the world’s leading robusta producer.

Inventory trends offered mixed signals. Exchange-tracked arabica stocks, while still relatively low, have rebounded from recent multi-year lows. Robusta inventories also recovered modestly after hitting their weakest levels in over a year.

Trade flows have also influenced the market. Earlier U.S. tariffs reduced American purchases of Brazilian coffee during late summer and early autumn, sharply cutting imports during that period. Although tariffs have since been reduced, U.S. coffee supplies remain tight.

On the supply side, expectations of ample global production continue to weigh on prices. Brazil’s crop agency recently revised its 2025 coffee output forecast higher, while Vietnam is projected to harvest one of its largest crops in several years if favorable weather persists.

That said, some longer-term data point to tightening conditions. Global coffee exports edged lower in the current marketing year, according to international industry figures.

Looking ahead, the USDA projects world coffee production to reach a record level in the 2025/26 season, driven by strong growth in robusta output that offsets a decline in arabica production. Ending global stocks are expected to fall, suggesting that while near-term supply is ample, the balance could tighten further down the road.