Tag: Brazil Coffee

Coffee Prices Rise on Supply Concerns

Posted on by Qahwa World

Dubai – Qahwa World

Coffee futures rose on Monday, recovering from earlier losses as concerns over global supply disruptions supported the market.

May arabica gained 2.52 percent, rising 7.20 points, while May robusta edged up 0.46 percent, adding 16 points.

The rebound followed reports that the Strait of Hormuz has been closed, disrupting a key global shipping route. The development has pushed up freight rates, insurance costs, and fuel prices, increasing pressure on coffee importers and roasters worldwide.

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Earlier in the session, prices had moved lower as improved weather conditions in Brazil eased concerns about crop stress. Rainfall in Minas Gerais, the country’s main arabica-growing region, reached 57.7 millimeters last week, about 139 percent of the historical average.

Expectations of a large Brazilian harvest also continue to weigh on the market. StoneX recently raised its forecast for Brazil’s 2026 to 2027 coffee production to a record 75.3 million bags, up from 70.7 million.

Export data, however, provided some support. Figures from Cecafé showed Brazil’s green coffee exports fell 27 percent year on year in February to 2.3 million bags. Data from the country’s Trade Ministry also showed total coffee exports declined 17.4 percent to 142,000 metric tons.

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At the same time, rising inventories continue to weigh on prices. Arabica stocks monitored by Intercontinental Exchange climbed to 572,004 bags last week, the highest level in five and a half months. Robusta inventories also reached a three and a half month high earlier this month before easing slightly.

Coffee markets have been under pressure in recent weeks. In February, arabica fell to its lowest level in more than 15 months, while robusta dropped to a seven month low, largely due to expectations of a strong Brazilian crop.

Brazil’s crop agency Conab estimates 2026 production will rise 17.2 percent to 66.2 million bags. Arabica output is expected to increase 23.2 percent, while robusta production may grow 6.3 percent.

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Globally, Rabobank projects coffee production will reach a record 180 million bags in the 2026 to 2027 season, up by around 8 million bags from the previous year.

Strong supply from Vietnam has also added pressure to the market. Coffee exports from the country rose 14 percent in the first two months of 2026 to 366,000 metric tons, while full-year 2025 exports increased 17.5 percent. Production is expected to rise 6 percent to 1.76 million metric tons.

According to the International Coffee Organization, global coffee exports for the current season edged down 0.3 percent to 138.66 million bags. Meanwhile, the USDA Foreign Agricultural Service forecasts global production will increase 2 percent to a record 178.85 million bags, even as ending stocks are expected to decline by 5.4 percent to 20.15 million bags.

Brazil’s Specialty Coffee Sector Gains Global Momentum

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Dubai – Qahwa World

The United States Department of Agriculture (USDA) published a detailed report titled “Brewing Opportunity – Brazil’s Specialty Coffee Sector Shows Strong Potential,” examining the rapid development of Brazil’s specialty coffee industry and the opportunities and challenges shaping its future.

Brazil remains the largest coffee producer and exporter in the world, while also ranking as the second-largest coffee-consuming country. Historically, the nation exported its highest-quality beans while domestic consumption focused largely on lower-grade coffee. In recent years, however, this pattern has begun to shift. Brazilian consumers are increasingly developing a taste for specialty coffee, driving growth in both production and local demand.

According to the report, the expansion of the specialty segment is supported by several structural advantages. Brazil benefits from favorable climatic conditions that allow the cultivation of diverse coffee varieties across multiple regions. In addition, the country has developed a strong network of research institutions, cooperatives, and producer organizations that focus on improving quality, innovation, and technical expertise within the coffee sector.

At the same time, the domestic market for coffee continues to expand, with consumers showing greater interest in differentiated products and higher-quality beans.

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Despite this progress, the report notes that Brazil’s specialty coffee sector still faces several structural challenges. Many producers struggle with limited access to rural credit, making it difficult to finance investments in equipment and infrastructure. Post-harvest processing facilities—such as washing stations, pulpers, sorting machines, and drying systems—also remain insufficient in some areas, limiting the ability of farmers to produce and market high-quality coffee.

Producers have also reported uneven access to technical assistance and a limited number of certified warehouses and exporters, which can reduce profitability and hinder broader participation in the specialty coffee market, particularly among small-scale farmers.

Although specialty coffee generally costs about 50 percent more than conventional coffee, the segment offers advantages beyond price. Buyers often establish longer-term relationships with producers, which can provide farmers with greater stability and security for future harvests.

  • Major Coffee-Producing Regions

Specialty coffee production in Brazil is concentrated mainly in high-altitude regions, where elevation and moderate temperatures contribute to denser beans and more complex flavor profiles.

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The state of Minas Gerais stands as Brazil’s leading producer of arabica and specialty coffees. Regions such as Sul de Minas, Cerrado Mineiro, Matas de Minas, and Mantiqueira de Minas form a well-organized production chain that includes farmers, cooperatives, exporters, warehouses, and research institutions. Minas Gerais alone produces around 24 million bags of coffee annually, representing nearly half of Brazil’s total coffee output.

Each sub-region offers distinctive characteristics. Cerrado Mineiro became the first coffee region in Brazil to receive Designation of Origin status, while Sul de Minas is known for its concentration of small farms and its large cooperative structure. Mantiqueira de Minas has gained international recognition for its high-altitude coffees, where significant temperature variation between day and night allows cherries to ripen slowly, resulting in sweeter and more aromatic beans.

In Espírito Santo, Brazil’s second-largest coffee-producing state, production is dominated by robusta—locally known as conilon—though high-altitude areas also produce quality arabica coffee. Regions such as Caparaó and Montanhas do Espírito Santo are known for small family farms and coffees with aromatic complexity and balanced acidity.

The state of São Paulo also contributes to the specialty segment through regions such as Alta Mogiana and Média Mogiana, where coffees typically display balanced acidity, strong aroma, and a creamy body.

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Other regions across Brazil contribute unique characteristics as well. Rondônia, located in the Amazon region, specializes in conilon production, while Paraná, historically a major coffee producer, continues to maintain output through small farms supported by cooperatives and research institutions. Meanwhile, Bahia, one of the country’s newer coffee regions, has gained attention for its use of advanced technology and mechanized farming systems, which support high productivity levels.

  • Quality Standards and Classification

Brazil follows internationally recognized quality standards for specialty coffee. The evaluation system used by the Specialty Coffee Association scores arabica coffees on a 100-point scale, with coffees scoring 80 points or higher classified as specialty grade.

Coffees are evaluated according to sensory characteristics such as aroma, flavor, acidity, body, sweetness, balance, uniformity, and aftertaste, while also being assessed for physical defects.

Brazil also uses national classification systems aligned with these international standards. The country’s official classification process evaluates cup quality using descriptors such as strictly soft, soft, and hard, among others.

In May 2025, the Brazil Specialty Coffee Association adopted a new evaluation protocol known as Coffee Value Assessment, designed to create a more standardized approach to assessing quality and to improve communication between producers and international buyers.

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Brazilian producers may also use additional certification programs—such as organic or fair-trade certifications—to meet international market requirements, although these certifications do not automatically classify a coffee as specialty.

The quality of Brazilian robusta and conilon coffee has also improved in recent years, contributing to stronger demand and higher prices. Brazil is currently the second-largest producer of robusta coffee globally, behind Vietnam.

  • Challenges Affecting Growth

The report highlights genetics as another key factor in specialty coffee production. However, inconsistencies between international and national databases for coffee cultivars sometimes create challenges. Some varieties recognized internationally for exceptional quality are not officially registered for cultivation in Brazil, while many important Brazilian cultivars are absent from international quality catalogues.

These discrepancies can complicate certification and recognition processes for producers and may increase production costs or reduce profitability.

Specialty coffee production also requires significant investments in cultivation techniques and post-harvest infrastructure. Because these investments can be costly, the specialty coffee sector in Brazil remains concentrated among a relatively limited number of producers.

  • Growing Interest Among Brazilian Consumers

Although Brazil has long been a global coffee powerhouse, domestic appreciation for specialty coffee is relatively recent. Since the early 2000s, coffee culture has evolved significantly as consumers began exploring higher-quality beans, alternative brewing methods, and greater transparency regarding coffee origins.

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Recent consumer surveys show that some Brazilians have reduced overall coffee consumption in response to rising prices. Nevertheless, demand for specialty coffee continues to grow. The report indicates that consumption of specialty coffee in Brazil has been increasing by about 15 percent per year, significantly faster than the growth of traditional coffee consumption.

Specialty coffee consumption in the country is estimated at around 70,000 tons annually, representing approximately five to ten percent of total coffee consumption.

Consumers interested in specialty coffee tend to seek differentiated beans, visit cafés that emphasize brewing quality, and show greater interest in sustainability practices and traceability.

  • Trade Trends and Export Markets

Brazilian export data does not track specialty coffee as a separate category. Instead, exporters often group it under “differentiated coffees,” which include beans certified for quality, sustainability, or other distinctive characteristics.

According to export data, Brazil shipped 8.1 million bags of differentiated coffees in 2025, representing about 20 percent of the country’s total coffee exports. Although export volumes declined compared with the previous year, revenues increased significantly to approximately 3.5 billion dollars, partly due to favorable exchange rates.

The United States remained the largest destination for Brazilian differentiated coffees, importing about 1.3 million bags, followed by Germany, Belgium, the Netherlands, and Italy. European markets often function as distribution hubs that supply specialty coffee to other regions.

  • Global Promotion and Future Outlook

Brazil is actively promoting its specialty coffee sector internationally through initiatives designed to strengthen its presence in global markets. One such program focuses on marketing Brazilian specialty coffees through trade fairs, branding campaigns, and partnerships with international buyers.

Priority markets include the United States, Japan, China, South Korea, the United Arab Emirates, France, and Australia, while processed coffee products such as roasted and ground coffee are being promoted in markets including Canada, Chile, China, and the United States.

The initiative is scheduled to run until 2027 and aims to expand Brazil’s leadership in the global specialty coffee sector.

The report concludes that rising international demand for traceable, sustainable, and high-quality coffee—combined with ongoing improvements in production and promotion—positions Brazil’s specialty coffee industry for continued growth in the years ahead.

Brazil Crop Expectations Pressure Global Coffee Prices

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Dubai – Qahwa World

Coffee futures closed lower at the end of the week as expectations of stronger global production continued to weigh on sentiment. The market reaction reflects growing confidence that supply conditions may improve in the upcoming seasons, particularly with Brazil at the center of the outlook.

A recent projection from Rabobank indicates that global coffee production could reach 180 million bags in the 2026/27 season, potentially marking a record and representing an increase of around 8 million bags compared with the previous year. The forecast has reinforced a broader shift in market expectations after months dominated by tight supply concerns.

In Brazil, fresh estimates from Conab point to a significant rebound in output for 2026. The agency projects total production at 66.2 million bags, up 17.2% year-on-year. Arabica output is expected to rise more sharply, increasing 23.2% to 44.1 million bags, while robusta production is forecast to grow 6.3% to 22.1 million bags.

Weather conditions have contributed to the improved outlook. Data from Somar Meteorologia show that Minas Gerais, Brazil’s largest arabica-producing region, received rainfall above the historical average during mid-February. Adequate moisture during key crop development stages has strengthened expectations for higher yields, adding pressure to prices that have already retreated from recent highs.

Vietnam has also played a role in easing supply concerns. As the world’s leading robusta producer, the country reported a sharp year-on-year increase in coffee exports in January, according to official statistics. Full-year 2025 exports also recorded solid growth. Production for the 2025/26 season is projected to reach approximately 1.76 million metric tons, or about 29.4 million bags, reflecting a four-year high. The expansion in Vietnamese output continues to influence the robusta segment in particular.

Exchange-monitored inventories have shown signs of recovery as well. Certified arabica stocks tracked by ICE have risen from their lows reached late last year, while robusta inventories have also moved higher after touching multi-month troughs. The increase in available certified stocks signals improved short-term supply availability.

At the same time, some supply-side developments have provided limited support. Brazil’s Trade Ministry reported a year-on-year decline in January coffee exports. In Colombia, the National Federation of Coffee Growers announced that January production fell sharply compared with the same month last year, tightening availability in the washed arabica segment.

On the global level, the International Coffee Organization has reported a slight decline in coffee exports for the current October–September marketing year. However, the broader outlook remains shaped by expectations of higher output. The USDA Foreign Agricultural Service projects world coffee production in 2025/26 at nearly 179 million bags, with robusta output increasing while arabica production is forecast to decline modestly. Ending stocks are expected to ease compared with the previous season.

Overall, improved crop prospects in Brazil, expanding robusta production in Vietnam, and recovering inventories are collectively reshaping the global coffee balance, placing downward pressure on prices as the market reassesses supply risks.

Coffee Prices Consolidate Amid Mixed Signals in Global Market

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DUBAI – QAHWA WORLD

Coffee prices settled mixed on Wednesday, consolidating recent losses after a period of significant pressure. May Arabica coffee (KCK26) closed slightly lower at -0.65 (-0.23%), while May Robusta coffee (RMK26) rose +63 (+1.73%).

Arabica and robusta prices had tumbled earlier this month, with arabica reaching a 15-month low on Tuesday and robusta falling to a 6.5-month low on Monday, driven by expectations of a record Brazilian crop. Brazil’s crop forecasting agency, Conab, projected on February 5 that 2026 coffee production will rise +17.2% year-on-year to 66.2 million bags. Arabica production is expected to increase +23.2% to 44.1 million bags, while robusta will climb +6.3% to 22.1 million bags.

Wednesday’s losses were limited due to a stronger Brazilian real, which rose to a 1.75-year high against the U.S. dollar, discouraging export sales. Additionally, adequate rainfall in Brazil is supporting crop prospects. Somar Meteorologia reported that Minas Gerais, the country’s largest arabica-growing region, received 62.8 mm of rain during the week ending February 13, or 138% of the historical average.

Vietnam, the world’s largest robusta producer, is also influencing the market. January coffee exports surged 38.3% year-on-year to 198,000 metric tonnes, while total 2025 exports increased 17.5% to 1.58 million metric tonnes. Vietnam’s 2025/26 production is projected to rise 6% to a four-year high of 1.76 million metric tonnes (29.4 million bags).

ICE coffee inventories have shown signs of recovery, adding pressure to prices. Arabica stocks monitored by ICE rose to a 3.75-month high of 461,829 bags on January 7 after falling to a 1.75-year low in November. Similarly, ICE robusta inventories recovered to a 2.75-month high of 4,662 lots on January 26.

On the positive side, Brazil’s Trade Ministry reported that January exports fell -42.4% year-on-year to 141,000 metric tonnes, while lower supplies from Colombia, the world’s second-largest arabica producer, supported prices after January production dropped -34% to 893,000 bags.

Globally, the International Coffee Organization reported that total coffee exports for the current marketing year (October–September) declined slightly by -0.3% to 138.658 million bags. The USDA Foreign Agriculture Service projected in December that world coffee production in 2025/26 will reach a record 178.848 million bags, with arabica falling -4.7% to 95.515 million bags and robusta rising +10.9% to 83.333 million bags. Brazil’s production is expected to decline by 3.1% to 63 million bags, while Vietnam’s output will increase by 6.2% to 30.8 million bags. Ending stocks for 2025/26 are forecast to fall -5.4% to 20.148 million bags.

Overall, the coffee market faces mixed signals, with strong Brazilian supply forecasts and Vietnamese robusta exports exerting downward pressure, while lower production in Colombia and supply constraints in certain markets provide support for prices.

Coffee Prices Rise as Demand Returns After Sharp Decline

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DUBAI – QAHWA WORLD

Coffee prices rose for a second consecutive day at the end of the week, following recent declines that prompted roasting companies to return to the market and rebuild their low inventories.

March arabica contracts recorded a slight increase, while robusta contracts rose to a one-week high, signaling strong renewed demand.

  • Sharp Declines Trigger Buying

Over the past two weeks, coffee faced significant pressure. Robusta prices fell to a six-month low, while arabica prices reached the same level, amid expectations of a plentiful Brazilian crop.

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Brazil’s National Supply Agency Conab announced that the country’s coffee production in 2026 is expected to rise by 17.2 percent compared to last year, reaching a record 66.2 million bags. Arabica production is projected to increase by 23.2 percent to 44.1 million bags, while robusta output is expected to rise by 6.3 percent to 22.1 million bags.

  • Rainfall Improves Crop Outlook

Heavy rainfall has eased drought concerns and improved expectations for Brazil’s coffee harvest. Minas Gerais, the country’s largest arabica-growing region, received 72.6 millimeters of rain for the week ending February 6, or 113 percent of the historical average, according to Somar Meteorologia.

  • Vietnam Increases Supply

Meanwhile, rising exports from Vietnam have added pressure on robusta prices. Vietnam’s January exports rose 38.3 percent year-on-year to 198,000 metric tons, while full-year 2025 exports increased 17.5 percent to 1.58 million metric tons.

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Vietnam’s coffee production for the 2025/2026 season is expected to rise six percent to 1.76 million metric tons, the highest level in four years, further boosting global robusta supply.

  • Inventory Recovery Limits Gains

Coffee inventories monitored by international exchanges have recovered from previous lows, moderating price gains. Arabica stocks rose from a one-and-a-half-year low, and robusta inventories recovered from a thirteen-month low to reach a two-month high.

  • Price Support Factors

Despite abundant supply in some regions, supportive factors remain. Brazil’s trade data showed January exports fell 42.4 percent year-on-year.

Colombia’s coffee production fell 34 percent in January to 893,000 bags, supporting arabica prices, as Colombia is the world’s second-largest producer of arabica coffee.

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Globally, the International Coffee Organization reported that world coffee exports during the marketing year from October to September declined 0.3 percent to 138.658 million bags, reflecting a slight tightening of global supply.

  • Global Production Forecast

The United States Department of Agriculture’s biannual report projects that world coffee production in the 2025/2026 season will rise two percent to a record 178.848 million bags. Arabica production is expected to decrease 4.7 percent to 95.515 million bags, while robusta output will rise 10.9 percent to 83.333 million bags.

Global ending stocks are projected to fall 5.4 percent to 20.148 million bags from 21.307 million bags in the previous season.

This data shows that the coffee market is balancing between ample supply in some countries and declining production and exports in others, alongside renewed demand at low price levels, keeping prices volatile and closely watched in the coming weeks.

 

Brazil’s Canephora Coffee Cultivation Moves Beyond Traditional Regions

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DUBAI – QAHWA WORLD

Brazil’s production of canephora coffee—covering conilon and robusta varieties—is spreading into states that have historically focused little on these crops. The expansion is being fueled largely by firm prices and growing demand, according to industry representatives and official data.

While Brazil remains the world’s leading producer of arabica coffee, canephora output has gained momentum in recent years. Canephora beans, typically used in espresso blends and instant coffee, offer higher yields compared to arabica and have become increasingly attractive to growers. Brazil is currently the second-largest canephora producer globally and continues to narrow the gap with Vietnam, the leading producer.

Traditionally, the state of Espírito Santo has dominated Brazil’s canephora production, particularly conilon. However, data from Companhia Nacional de Abastecimento (Conab) show that since 2020, other states—including Mato Grosso and Minas Gerais—have significantly increased their output.

  • Prices Encourage New Plantings

Strong international prices over the past year have encouraged farmers to plant canephora outside its traditional strongholds. Although prices have eased from last year’s highs, they remain above long-term averages, sustaining producer interest. Improvements in bean quality have also contributed to broader acceptance in both domestic and export markets.

Minas Gerais, best known as Brazil’s largest arabica producer, is projected to nearly double its canephora production between 2020 and 2026, reaching more than 600,000 60-kilogram bags, according to Conab forecasts.

  • Mato Grosso Eyes Productivity Gains

In Mato Grosso, a state better known for soybeans and corn, efforts are underway to boost canephora cultivation. Agronomists are drawing inspiration from neighboring Rondônia, a key robusta-producing state with higher average yields. Current productivity in Mato Grosso trails Rondônia’s levels, but local research and extension agencies are working to close the gap.

Conab estimates that Mato Grosso’s canephora production will approach 300,000 bags this year, nearly doubling compared with 2020 levels.

  • Ceará Explores New Opportunities

Further north, Ceará is evaluating the potential for both conilon and robusta Amazonica, a variety commonly cultivated in Rondônia. Although Ceará’s current production is modest and grouped with smaller producing states such as Acre and Pará in official statistics, combined output from these regions is projected to increase substantially by 2026.

Ceará’s proximity to ports and transport infrastructure is seen as an advantage for export-oriented growth. State officials anticipate an initial expansion of planted area in the coming years, with room for further development if market conditions remain favorable.

Overall, Brazil’s canephora sector is undergoing geographic diversification, supported by price incentives, productivity gains, and broader market demand.

Global Coffee Market Roadmap—January 2026

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DUBAI – QAHWA

January 2026 was not merely the start of a new calendar year for the International Coffee Organization (ICO); it served as a critical testing ground for the resilience of global supply chains against dual shocks: climatic in the primary production origin (Brazil) and logistical in vital waterways. The ICO Composite Indicator Price (I-CIP) averaged 296.89 US cents/lb, a 2.6% decrease from December 2025. While this figure may appear as a slight retreat, a deep dive into daily market movements reveals a state of “silent boiling” that culminated in a sharp price collapse in the final three days of the month, ending a long period of relative stability since late 2025.

  • I. Price Psychology and the “Minas Gerais” Effect

Prices entered January in a state of “cautious balance” (range-bound), lacking clear directional catalysts. Prices fluctuated within a narrow band, interpreted by analysts as being high enough to keep farmers financially satisfied but not low enough to trigger aggressive stock liquidations. However, this calm was shattered by two opposing factors:

Currency Impact and Hedging (Early Month): In the first week, around January 6th, the indicator rose by 3.2%. This increase was driven not by supply shortages, but by the strength of the Brazilian Real. The positive correlation between the Real’s strength and global coffee prices is a classic driver; a stronger local currency reduces export incentives for Brazilian farmers who then prefer selling in the domestic market (CEPEA index), which offered attractive premiums over international prices, creating temporary upward pressure.

The Saving Rain Shock (End of Month): A dramatic shift occurred between January 27th and 30th, with the market losing over 21 cents in a flash. Eyes were glued to weather maps over Minas Gerais, the heart of Brazil’s coffee production. Reports of heavy, consistent rainfall dissipated the “risk premium” previously added by traders fearing drought. This precipitation not only improved the current crop’s condition but provided strong positive signals for the 2026/2027 season, prompting investment funds and speculators to liquidate long positions, causing the indicator to drop to 283.02 cents.

  • 2. Structural Shifts in Demand (Robusta as the New Leader)

The report reveals a significant economic phenomenon: diverging performance among the four main coffee groups. While Arabica varieties suffered sharp declines—up to 4.5% in the “Other Milds” category—Robusta was the only group to achieve positive growth (1.0%), stabilizing at 192.52 cents. This divergence is no coincidence; it is the result of a “structural” shift in the global coffee industry. Amid rising global living costs, major international roasters have begun adjusting “blends” to increase the proportion of Robusta to lower final costs for consumers. This sustained demand for Robusta narrowed the price gap (arbitrage) between the New York and London exchanges by 8.4%, signaling that Robusta is emerging as the actual driver of corporate profit stability.

  • 3. Export Geography: Redrawing the Global Map

Global green coffee exports in December 2025 reached a strong 10.15 million bags, up 9.2%. However, this hides stark regional disparities:

The Central America and Mexico Surge (81.3%): This figure must be read carefully; it reflects “recovery from paralysis” rather than a sudden productivity spike. In December 2024, tropical storms (notably Sara) delayed harvesting, making exports almost non-existent then. In December 2025, stabilized climate allowed coffee to flow normally to ports, resulting in a massive percentage increase compared to the previous year’s “trough.”

Asia and Oceania Leadership (Vietnam & Indonesia): The region grew by 38.4%, led by Vietnam (+30%). Vietnam compensated for early-season harvest delays through improved processing efficiency and the “base effect.” Indonesia and India also saw a combined 61.1% jump, reinforcing Asia’s position as a primary global supplier while South America falters.

South American Contraction (The Persistent Dilemma): For the 14th consecutive month, South America recorded a decline (-15.0%). Brazil fell by 18.5%, and notably, Colombia dropped by 18.9%. The report hypothesizes that Colombia may have reached its “maximum production capacity” due to environmental factors and labor structure changes.

  • 4. Uganda: A Unique African Success Story

Uganda stands out as the “hero” of the African continent, with exports jumping 52.5% in one month. This is the fruit of a national strategy to renew trees and expand Robusta acreage. Uganda aims to export 20 million bags by 2030, and current figures show it is on track, filling the void left by other struggling producers with competitive quality.

  • 5. Logistics: Red Sea Security as a Cooling Factor

A pivotal analytical point is the breakthrough in the Red Sea. Following long-term disruptions, major shipping lines resumed using the Suez Canal by January 12, 2026, after security stabilized. This has a direct price impact:

Reducing “Coffee on Water”: Shortening transit times freed up millions of bags previously held at sea for extra weeks, allowing them to reach European and American ports faster.

Increased Destination Stocks: The availability of coffee in consuming ports reduces “urgent” buying pressure, removing a key price support pillar from last year.

  • 6. Technical Analysis of Stocks and the “Backwardation” Dilemma

Despite export flows, the market faces a technical contradiction called “Backwardation,” where spot prices remain higher than futures. This indicates short-term “hunger” despite long-term optimism. Consequently, certified stocks remain at critical levels (50% of the 5-year average), acting as a “safety valve” that prevents total price collapse.

  • Conclusion and Future Outlook

The January 2026 report clarifies that the global coffee market is moving from a “supply crisis” to a “logistical and climatic rebalancing.” The 2.6% price drop is likely the start of a broader correction in Q1, provided Brazilian rains continue and Suez Canal traffic remains steady.

Coffee Prices Slide on Improved Supply Outlook

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Dubai – Qahwa World

Coffee prices extended their week-long decline on Wednesday, pressured by signs of improving global supply. March arabica coffee (KCH26) closed down 8.45 cents (-2.66%), while March ICE robusta coffee (RMH26) fell 49 points (-1.29%).

Arabica prices dropped to a 5.75-month low, and robusta touched a six-week low. The market has been weighed down by favourable weather and rising production expectations, particularly in Brazil and Vietnam.

Above-average rainfall in Brazil has eased concerns about dryness in key growing regions. Somar Meteorologia reported that Minas Gerais—the country’s largest Arabica-producing state—received 69.8 mm of rain in the week ended January 30, or 117% of the historical average.

Brazil’s supply outlook also turned more bearish after Conab, the country’s crop forecasting agency, raised its 2025 coffee production estimate by 2.4% to 56.54 million bags, up from 55.20 million bags projected in September.

Robusta prices have been further pressured by strong export and production prospects in Vietnam, the world’s largest robusta producer. Vietnam’s National Statistics Office reported that 2025 coffee exports rose 17.5% year over year to 1.58 million metric tonnes. Meanwhile, Vietnam’s 2025/26 coffee production is projected to increase 6% year over year to 1.76 million metric tonnes (29.4 million bags), a four-year high. The Vietnam Coffee and Cocoa Association has also said output could rise 10% from the previous season if weather conditions remain favourable.

Rising exchange inventories have added to bearish sentiment. ICE-monitored Arabica inventories rebounded to 461,829 bags on January 7, a 3.25-month high, after falling to a 1.75-year low in mid-November. ICE robusta inventories also recovered, climbing to a two-month high of 4,662 lots after reaching a 13-month low in December.

Some factors have provided limited support. Brazil’s coffee exports declined sharply in December, according to Cecafe. Total green coffee exports fell 18.4% year over year to 2.86 million bags, with Arabica exports down 10% and Robusta exports down 61%.

The International Coffee Organization reported that global coffee exports for the current October–September marketing year slipped 0.3% year over year to 138.66 million bags, signalling tighter trade flows.

Looking ahead, the USDA’s Foreign Agriculture Service projects global coffee production in 2025/26 will rise 2.0% year over year to a record 178.85 million bags. Arabica production is forecast to fall 4.7% to 95.52 million bags, while robusta output is expected to jump 10.9% to 83.33 million bags. Brazil’s production is projected to decline 3.1% to 63 million bags, while Vietnam’s output is forecast to rise 6.2% to a four-year high of 30.8 million bags. Global ending stocks are expected to fall 5.4% to 20.15 million bags.

Coffee Prices Jump as Brazilian Real Strengthens

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Coffee futures moved sharply higher on Tuesday, supported by a strong Brazilian real that reduced export incentives from the world’s largest coffee-producing country.

March arabica coffee futures climbed more than 3 percent, reaching their highest level in two weeks, while March robusta contracts also posted solid gains. Market participants pointed to currency movements and tightening export flows from Brazil as key drivers behind the rally.

  • Brazilian Real Boosts Coffee Markets

The Brazilian real strengthened to its highest level in roughly 20 months against the U.S. dollar, making coffee exports less attractive for Brazilian producers. As a result, exporters slowed sales, reducing supply availability on global markets and lifting futures prices.

Brazil remains the dominant supplier of arabica coffee, and shifts in its currency often have an immediate impact on international prices.

  • Exports Decline in Brazil

Recent export data added further support to prices. Brazil’s coffee exporters reported a sharp drop in green coffee shipments in December, with total exports falling more than 18 percent compared with the same period last year.

Arabica exports declined by double digits, while robusta shipments saw an even steeper year-over-year drop, signaling tighter short-term supply from Brazil.

  • Weather Concerns Add Support

Below-average rainfall in Brazil’s key growing regions also helped underpin prices. Minas Gerais, the country’s largest arabica-producing state, received significantly less rainfall than normal during mid-January, raising concerns about crop development during a critical period.

  • Inventory Recovery Caps Gains

Despite the bullish momentum, rising exchange-monitored inventories limited upside potential. Arabica stockpiles tracked by the exchange have rebounded from multi-year lows seen in November, while robusta inventories have also increased from recent lows.

The recovery in inventories suggests that near-term supply conditions may be less constrained than previously feared.

  • Global Supply Outlook Remains Mixed

Looking ahead, expectations of ample global production continue to weigh on longer-term price prospects. Brazil’s crop agency recently raised its forecast for the country’s 2025 coffee harvest, while Vietnam reported strong export growth and rising production estimates.

Vietnam, the world’s leading producer of robusta coffee, is projected to increase output further in the upcoming season, assuming favorable weather conditions persist.

At the same time, international data points to signs of tightening global availability. Worldwide coffee exports have edged lower during the current marketing year, and global ending stocks are forecast to decline despite record production levels.

  • Market Balance Still Fragile

Analysts note that coffee markets remain highly sensitive to currency movements, weather developments, and export flows. While supply projections appear comfortable on paper, any disruption in Brazil or Vietnam could quickly reignite volatility.

For now, strength in the Brazilian real and slowing exports have given coffee prices fresh upward momentum.

 

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.

Brazil Coffee Export Revenue Hits Record Despite Falling Volumes

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Brazil’s coffee export revenue reached a historic high of $15.6 billion in 2025, despite a significant decline in shipment volumes, according to the latest report from Cecafé, the Brazilian Coffee Exporters Council.

Released on January 19, the report shows that total coffee exports fell by more than 10 million 60-kilogram bags, dropping from a record 50,584,170 bags in 2024 to 40,049,222 bags in 2025—a decrease of over 20 percent. Even so, the 2025 figure remains higher than exports recorded in any year between 2020 and 2023.

Cecafé President Márco Ferreira attributed the surge in export earnings to steadily rising coffee prices throughout 2025. He noted that higher average monthly prices, combined with continued investment by Brazilian growers in technology, innovation, and quality, helped elevate both the standard and market value of Brazilian coffee.

The report also highlights the impact of United States tariffs, which led to a 55 percent decline in exports to the U.S. between August and November. The tariffs included a 40 percent national emergency levy, introduced on July 30, alongside a 10 percent reciprocal tariff. Both measures were lifted on November 12.

As a result of reduced U.S. demand, Germany emerged as Brazil’s largest coffee importer in 2025, followed by Italy, Japan, and Belgium.

Looking ahead, Ferreira expects Brazilian coffee exports in 2026 to once again exceed 40 million 60-kilogram bags, reinforcing the country’s position as the world’s largest coffee producer. By comparison, the record 2024 harvest generated approximately $12.5 billion in export revenue, while the 2023 crop earned $6.2 billion.

Coffee Prices Climb as Rain Forecasts in Brazil Remain Low

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Coffee futures rebounded today following early declines, buoyed by weather forecasts signaling limited rainfall in Brazil’s key coffee-producing regions over the coming week. March arabica (KCH26) gained +1.40 points (+0.39%), while March ICE robusta (RMH26) rose +52 points (+1.31%).

Earlier in the session, arabica fell to a 1.5-week low, pressured by a stronger U.S. dollar, as the DXY index reached a six-week high.

Last week, arabica prices surged to a one-month high amid below-average precipitation in Brazil, the world’s largest arabica coffee exporter. Data from Somar Meteorologia showed that Minas Gerais, Brazil’s main arabica-growing state, received just 26.5 mm of rainfall during the week ending January 9 — only 29% of the historical average.

Shrinking inventories on ICE exchanges are also lending support to prices. Arabica stocks tracked by ICE dropped to a 1.75-year low of 398,645 bags on November 20, before climbing to a 2.5-month high of 461,829 bags last Wednesday. Robusta inventories fell to a one-year low of 4,012 lots on December 10 but recovered to a five-week high of 4,278 lots later in December.

However, a strong supply outlook remains a headwind. Brazil’s crop agency Conab raised its 2025 coffee production estimate by 2.4% in December to 56.54 million bags, up from the September projection of 55.20 million bags.

Vietnam, the largest robusta producer, is also expanding its output, which pressures robusta prices. Its 2025 coffee exports jumped 17.5% year-on-year to 1.58 million metric tons, according to the country’s National Statistics Office. Vietnam’s coffee production for 2025/26 is forecast to rise 6% year-on-year to 1.76 MMT (29.4 million bags), marking a four-year high, with the Vietnam Coffee and Cocoa Association projecting a potential 10% increase if weather conditions remain favorable.

Global coffee supply data show a mixed picture. The International Coffee Organization (ICO) reported November 7 that world coffee exports declined 0.3% year-on-year to 138.658 million bags for the current marketing year (October–September). Meanwhile, the USDA’s Foreign Agriculture Service predicted a 2% increase in global coffee production in 2025/26 to 178.848 million bags, driven by a 10.9% jump in robusta output to 83.333 million bags, despite a 4.7% drop in arabica production to 95.515 million bags. The report also projected Brazil’s production would fall 3.1% to 63 million bags, while Vietnam’s output rises 6.2% to a four-year high of 30.8 million bags. Ending stocks are expected to decline 5.4% to 20.148 million bags from 21.307 million bags in 2024/25.