Global Coffee Markets at Crossroads: Arabica Strength Masks Robusta Weakness in Latest Trading Session

Coffee markets painted a mixed picture on Monday as arabica coffee for March delivery rose modestly while robusta coffee struggled toward 4-week lows. The divergence reflects complex dynamics in both supply and demand fundamentals across the world’s two major coffee varieties. March arabica contracts gained +1.00 points (+0.30%), while March robusta coffee futures declined -84 points (-2.04%), revealing contrasting market sentiment despite being part of the same commodity complex.

Mild technical short covering helped lift arabica prices from potential technical breakdown levels on Monday. Prices had threatened to breach last Friday’s 5.5-month low but found support as traders covered bearish bets. This technical rebound came during a week marked by persistent pressure from production forecasts and favorable growing conditions in Brazil, the world’s largest arabica producer.

Brazil’s Abundant Rainfall Reshapes Arabica Outlook

Recent weather patterns in Brazil’s major coffee regions have shifted the supply equation significantly. Somar Meteorologia reported that Minas Gerais—Brazil’s largest arabica coffee-growing territory—received 69.8 mm of rain during the week ending January 30, representing 117% of historical averages. Such above-average moisture is beneficial for crop development and yields but bearish for near-term prices due to expectations of larger harvests.

Brazil’s official crop forecasting body Conab raised its 2025 total coffee production estimate by 2.4% to 56.54 million bags on December 4, increasing pressure on prices. This upward revision from 55.20 million bags reflects confidence in production capacity across both arabica and robusta varieties.

Robusta Coffee Pressured by Vietnamese Supply Surge

Vietnam’s position as the world’s largest robusta coffee producer continues to exert downward pressure on robusta prices globally. Vietnam’s National Statistics Office reported on January 5 that 2025 coffee exports jumped 17.5% year-over-year to 1.58 MMT (million metric tons), signaling robust supply momentum from the Southeast Asian powerhouse.

Production prospects for robusta coffee in Vietnam look even more formidable. The 2025/26 crop is projected to climb 6% year-over-year to 1.76 MMT, equivalent to 29.4 million bags—a 4-year peak. The Vietnam Coffee and Cocoa Association confirmed in October that output could reach 10% higher than the prior crop year if weather conditions remain favorable, establishing Vietnam as an increasingly dominant force in global robusta supplies.

Inventory Recovery Signals Market Adjustment

While Brazilian export volumes have contracted sharply, global storage levels have rebounded from multi-year lows. ICE-monitored arabica inventories had fallen to a 1.75-year low of 396,513 bags on November 18 but recovered to a 3.25-month high of 461,829 bags by January 7. Similarly, robusta coffee inventories touched a 13-month low of 4,012 lots on December 10 before climbing to 4,662 lots by late January.

This inventory recovery occurs even as Brazil’s green coffee exports contracted -18.4% in December to 2.86 million bags. Arabica exports from Brazil declined 10% year-over-year to 2.6 million bags, while robusta coffee shipments plummeted 61% year-over-year to just 222,147 bags, reflecting seasonal patterns and inventory management strategies.

Longer-Term Production Forecasts Paint Evolving Picture

The USDA Foreign Agriculture Service’s December 18 assessment projected world coffee production in 2025/26 will increase 2.0% year-over-year to a record 178.848 million bags. However, the growth masks shifting regional dynamics: arabica production is expected to decline 4.7% to 95.515 million bags while robusta production surges 10.9% to 83.333 million bags.

Brazil specifically faces production headwinds, with FAS forecasting a 3.1% decline to 63 million bags for 2025/26. Conversely, Vietnam’s output is projected to rise 6.2% year-over-year to 30.8 million bags, reinforcing Southeast Asia’s expanding share of global supply. These shifts suggest structural changes in coffee markets favoring robusta-producing regions.

Global ending stocks for 2025/26 are forecast to fall 5.4% to 20.148 million bags from 21.307 million bags in 2024/25, indicating tightening supplies despite increased production. International Coffee Organization data showed October-September global exports fell 0.3% year-over-year to 138.658 million bags, suggesting demand headwinds persist alongside supply evolution.

What This Means for Coffee Traders

The divergence between arabica and robusta coffee reflects fundamental supply rebalancing. Arabica’s technical bounce masks underlying bearish pressure from Brazilian production optimism, while robusta coffee faces explicit headwinds from Vietnamese production records. Traders monitoring these dynamics through comprehensive commodity analysis platforms can track inventory flows, production forecasts, and export trends to anticipate price direction. The coming months will test whether tightening ending stocks can offset robust production projections and support prices across both varieties.