Coffee Prices Fall: Brazil Rains & Rising Supplies Weigh on Market

Coffee futures experienced a significant downturn this week, with both arabica and robusta varieties hitting multi-month lows. The price decline is largely attributed to improved weather conditions in Brazil, the world’s leading coffee producer, and increased supply from Vietnam, the largest producer of robusta beans.

As of Tuesday, February 3, 2026, March arabica coffee (KCH26) closed down 4.85% at a 5.5-month low, while March ICE robusta coffee (RMH26) fell 5.44% to a 6-week low. This extends a week-long plunge in prices, reflecting growing market confidence in future supply.

The shift in market sentiment is directly linked to rainfall in Minas Gerais, Brazil’s primary coffee-growing region. Somar Meteorologia reported on Monday, February 2, 2026, that the region received 69.8 mm of rain during the week ending January 30, 2026, exceeding the historical average by 117%. This substantial rainfall has alleviated concerns about dryness that had been supporting prices earlier in the season.

Brazil’s national crop forecasting agency, Conab, further bolstered the bearish outlook by raising its total 2025 coffee production estimate by 2.4% to 56.54 million bags on December 4, 2025. This upward revision, from a previous estimate of 55.20 million bags in September, signals a larger-than-anticipated harvest.

Adding to the downward pressure on prices is a surge in Vietnamese coffee exports. Vietnam’s National Statistics Office reported on January 5, 2026, that 2025 coffee exports jumped 17.5% year-on-year to 1.58 million metric tons (MMT). Projections indicate continued growth, with Vietnam’s 2025/26 coffee production expected to climb 6% year-on-year to 1.76 MMT, or 29.4 million bags – a four-year high. The Vietnam Coffee and Cocoa Association (Vicofa) anticipates a 10% increase in output for the 2025/26 crop year, contingent on favorable weather conditions.

While the overall trend points to increased supply, some countervailing factors are present. Brazil’s green coffee exports declined 18.4% in December to 2.86 million bags, suggesting potentially tighter global supplies in the short term. Global coffee exports for the current marketing year (October-September) also saw a slight decrease of 0.3% year-on-year, reaching 138.658 million bags, according to the International Coffee Organization (ICO).

Inventory levels at ICE-monitored warehouses have shown some recovery, potentially contributing to the easing of price pressures. Arabica inventories rose to a 3.25-month high of 461,829 bags on January 7, 2026, after falling to a 1.75-year low in November. Robusta inventories also increased to a 2-month high of 4,662 lots on January 26, 2026, following a 13-month low in December.

Looking ahead, the USDA’s Foreign Agriculture Service (FAS) projects world coffee production to reach a record 178.848 million bags in 2025/26, a 2% increase year-on-year. However, this overall increase is tempered by a projected 4.7% decrease in arabica production to 95.515 million bags, offset by a substantial 10.9% increase in robusta production to 83.333 million bags. FAS forecasts Brazil’s 2025/26 coffee production to decline by 3.1% year-on-year to 63 million bags, while Vietnam’s output is expected to rise by 6.2% to a four-year high of 30.8 million bags.

Despite the projected increase in global production, FAS anticipates that 2025/26 ending stocks will fall by 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25. This suggests that while supply is increasing, demand remains robust, potentially limiting the extent of further price declines.

The current market dynamics highlight the complex interplay of weather patterns, national production policies, and global trade flows in shaping coffee prices. The combination of favorable conditions in Brazil and increased output from Vietnam is exerting significant downward pressure, but factors such as declining Brazilian exports and robust global demand could provide some support to the market in the coming months.