Coffee prices slid nearly 5% today as a wave of supply-heavy data extended a week-long selloff across both arabica and robusta contracts. The move reflects a classic supply shock + inventory rebuild story.
1) Brazil supply outlook turns sharply bullish
Brazil’s crop forecaster Conab projected record 2026 production, lifting expectations by +17.2% YoY to 66.2 million bags.
- Arabica: +23.2% YoY to 44.1 million bags
- Robusta: +6.3% YoY to 22.1 million bags
That single update reset near-term balances and pressured prices immediately.
2) Vietnam exports surge, weighing on robusta
Vietnam, the world’s largest robusta producer, reported a sharp jump in shipments. The Vietnam National Statistics Office said January exports surged 38.3% YoY to 198,000 tonnes, while 2025 exports rose 17.5% YoY to 1.58 MMT.
Heavier flows into the market are bearish for robusta and spill over to arabica sentiment.
3) Weather improves in Brazil’s key growing belt
Above-average rainfall eased earlier dryness worries. Somar Meteorologia reported Minas Gerais received 69.8 mm in the week to Jan 30—117% of the historical average—supporting crop prospects and adding pressure to prices.
4) Inventories are rebuilding
ICE-monitored stocks have recovered, reducing scarcity fears:
- Arabica: rebounded from a 1.75-year low (Nov) to a 3.25-month high by early January.
- Robusta: climbed from a 13-month low (Dec) to a 2-month high last week.
Rising inventories are typically price-negative.
5) Medium-term forecasts reinforce supply comfort
The USDA Foreign Agricultural Service expects world coffee output +2.0% YoY in 2025/26 to a record 178.85 million bags. While arabica is seen lower, robusta output is projected +10.9%, cushioning global supply. Ending stocks are forecast to fall modestly, but not enough to offset the near-term glut.
Offsetting positives—too small, too late (for now)
- Brazil’s January exports fell 42.4% YoY, offering some support.
- The International Coffee Organization noted global exports are slightly lower YoY this marketing year.
These positives were overwhelmed by the scale and timing of new supply signals.
Bottom line
Coffee is down sharply because markets are repricing for abundant near-term supply: record Brazil projections, surging Vietnam exports, improving weather, and rebuilding ICE inventories. Until demand surprises or supply risks re-emerge, the path of least resistance remains lower for prices.