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Cup of coffe with beans on the side by Carol La Rosa via Shutterstock <\/p>\n
March arabica coffee (KCH26<\/a>) on Tuesday closed up +4.20 (+1.18%). \u00a0March ICE robusta coffee (RMH26<\/a>) closed up +36 (+0.92%).<\/p>\n Coffee prices settled higher on Tuesday amid concerns that excessive dryness in Brazil could lead to smaller coffee yields. \u00a0Last Thursday, arabica rallied to a 1-month high due to below-average rainfall in Brazil, the world’s largest arabica producer. \u00a0Somar Meteorologia reported Monday that Brazil’s largest arabica coffee-growing area, Minas Gerais, received 26.5 mm of rain during the week ended January 9, or 29% of the historical average. \u00a0<\/p>\n Shrinking ICE coffee inventories are bullish for prices. \u00a0ICE-monitored arabica inventories fell to a 1.75-year low of 398,645 bags on November 20, although they recovered to a 2.5-month high of 461,829 bags last Wednesday. \u00a0ICE robusta coffee inventories fell to a 1-year low of 4,012 lots on December 10 but recovered to a 5-week high of 4,278 lots on December 23 and 24.<\/p>\n Soaring coffee exports from Vietnam, the world’s largest robusta producer, are bearish for robusta prices. \u00a0Vietnam’s National Statistics Office reported last Monday that Vietnam’s 2025 coffee exports jumped +17.5% y\/ to 1.58 MMT. \u00a0<\/p>\n The outlook for ample coffee supplies is weighing on prices. \u00a0On December 4, Conab, Brazil’s crop forecasting agency, raised its total Brazil 2025 coffee production estimate by 2.4% to 56.54 million bags, from a September estimate of 55.20 million bags. \u00a0<\/p>\n Increased Vietnamese coffee supplies are bearish for prices. \u00a0Vietnam’s 2025\/26 coffee production is projected to climb +6% y\/y to 1.76 MMT, or 29.4 million bags, a 4-year high. \u00a0Also, the Vietnam Coffee and Cocoa Association (Vicofa) said on October 24 that Vietnam’s coffee output in 2025\/26 will be 10% higher than the previous crop year if weather conditions remain favorable. \u00a0 Vietnam is the world’s largest producer of robusta coffee.<\/p>\n Signs of tighter global coffee supplies are supportive of prices, as the International Coffee Organization (ICO) on November 7 reported that global coffee exports for the current marketing year (Oct-Sep) fell -0.3% y\/y to 138.658 million bags.<\/p>\n The USDA’s Foreign Agriculture Service (FAS) bi-annual report on December 18 projected that world coffee production in 2025\/26 will increase by +2.0% y\/y to a record 178.848 million bags, with a -4.7% decrease in arabica production to 95.515 million bags and a +10.9% increase in robusta production to 83.333 million bags. \u00a0FAS forecasted that Brazil’s 2025\/26 coffee production will decline by -3.1% y\/y to 63 million bags and that Vietnam’s 2025\/26 coffee output will rise by 6.2% y\/y to a 4-year high of 30.8 million bags. \u00a0FAS forecasts that 2025\/26 ending stocks will fall by -5.4% to 20.148 million bags from 21.307 million bags in 2024\/25. \n On the date of publication,<\/p>\n
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