Global Coffee Market News: Price Surge Driven by Dollar Weakness and Supply Dynamics

The coffee market news this week shows upward momentum across both major varieties. March arabica futures (KCH26) climbed +5.35 points, or +1.52%, while March ICE robusta contracts (RMH26) gained +55 points, representing a +1.33% increase. The rally reflects a convergence of factors reshaping coffee market dynamics, with currency movements playing a central role alongside shifting supply expectations.

Currency Headwinds Propel Arabica and Robusta Futures Higher

A weakening U.S. dollar index continues to be the primary catalyst for coffee prices. The dollar extended its downward trajectory, dropping another -0.5% to touch a fresh 4-month low. This currency environment has created favorable conditions across soft commodities, with coffee market participants responding positively as a weaker greenback makes dollar-denominated commodities more attractive to foreign buyers. The relationship between currency movements and commodity valuations remains a key driver in global coffee market news.

Brazilian Production Forecast and Weather Challenges Shape Arabica Outlook

Brazil, the world’s dominant arabica producer, is experiencing weather headwinds that could support prices. Minas Gerais, the country’s largest coffee-growing region, received only 33.9 mm of rainfall during the week ending January 16—a significant shortfall at just 53% of historical averages. This moisture deficit could pressure yield prospects in coming months.

However, Brazil’s official crop forecasting agency Conab recently raised its total 2025 production estimate by 2.4% to 56.54 million bags, suggesting ample supply ahead. Meanwhile, Brazilian coffee exports have faltered, with total December green coffee shipments falling -18.4% to 2.86 million bags according to Cecafe. Arabica exports declined -10% year-over-year to 2.6 million bags, while robusta shipments plummeted -61% annually to 222,147 bags. These export figures may reflect logistics and weather impacts rather than structural supply concerns.

Vietnamese Coffee Surge and Global Supply Dynamics

Vietnam, the world’s largest robusta producer, is ramping up production significantly. Coffee exports from Vietnam surged +17.5% year-over-year to 1.58 million metric tons in 2025, according to the country’s National Statistics Office. Vietnam’s coffee production for the 2025/26 crop year is projected to climb +6% to 1.76 MMT (29.4 million bags), marking a 4-year high. The Vietnam Coffee and Cocoa Association noted that output could reach 10% higher than the previous crop year if favorable weather persists.

This production surge in robusta is a key consideration in coffee market news, as it increases global availability of the lower-grade variety and could weigh on robusta prices despite current strength.

Inventory Recovery and Global Production Outlook for Coffee Market

ICE-monitored arabica and robusta inventories have recovered from recent lows, presenting a mixed picture for the coffee market. Arabica stocks fell to a 1.75-year low of 398,645 bags in November but rebounded to 461,829 bags by mid-January. Similarly, robusta inventories hit a 1-year low of 4,012 lots in December before recovering to 4,609 lots by late January. These inventory increases could moderate upside pressure on prices.

The USDA’s Foreign Agriculture Service projects that world coffee production for 2025/26 will increase +2.0% year-over-year to a record 178.848 million bags. However, the composition matters: arabica production is expected to decline -4.7% to 95.515 million bags, while robusta production jumps +10.9% to 83.333 million bags. Brazil’s 2025/26 output is forecast to drop -3.1% to 63 million bags, while Vietnam’s production is expected to rise 6.2% to a 4-year high of 30.8 million bags. Ending stocks for 2025/26 are projected to fall -5.4% to 20.148 million bags from 21.307 million bags in 2024/25.

Meanwhile, the International Coffee Organization reported that global coffee exports for the current marketing year (October-September) fell -0.3% year-over-year to 138.658 million bags, suggesting that despite production increases, near-term export activity remains constrained. This nuance reinforces the importance of monitoring both supply forecasts and actual trade flows when tracking coffee market news.

The current coffee market picture reflects a delicate balance between currency support, weather concerns in key producing regions, and the reality of increasing supplies from major robusta-producing nations. Traders and consumers alike will be watching whether inventory recoveries and production increases ultimately overwhelm the near-term bullish factors driving prices higher.