Weather Worries and Shrinking Stocks Drive Coffee Prices Higher

December arabica coffee (KCZ25) closed up +8.35 (+2.06%) on Wednesday, while January ICE robusta coffee (RMF26) gained +5 (+0.11%). Arabica climbed sharply to a 1.5-week high as fears of weather-related disruptions to global coffee production took hold.

Somar Meteorologia reported Monday that Brazil’s key arabica region of Minas Gerais received just 33.4 mm of rain during the week ended October 31—75% of the historical average—after receiving only 1% of normal rainfall the prior week. Meanwhile, Typhoon Kalmaegi is expected to make landfall in southern Vietnam later this week, threatening robusta crops in the country’s coffee-growing regions.

Declining ICE coffee inventories are adding further support to prices. The 50% tariffs on U.S. imports from Brazil have triggered a sharp drawdown in exchange-tracked stocks. ICE-monitored arabica inventories fell to a 1.75-year low of 429,770 bags on Wednesday, while ICE robusta inventories dropped to a 3.5-month low of 6,036 lots. American buyers have been canceling new contracts for Brazilian coffee amid the tariff uncertainty, tightening U.S. supply, given that roughly a third of the nation’s unroasted coffee originates from Brazil.

Coffee prices received an additional boost when the National Oceanic and Atmospheric Administration raised on September 16 the probability of a La Niña weather pattern in the Southern Hemisphere to 71% for the October–December period. La Niña is expected to bring excessive dryness to Brazil, potentially damaging the 2026/27 coffee crop. Brazil remains the world’s largest arabica producer.

Arabica prices are facing some headwinds, however, as speculation mounts that the U.S. could soon withdraw its 50% tariff on Brazilian coffee. Brazilian President Luiz Inácio Lula da Silva said last Monday that he had a “surprisingly good” meeting with President Trump and that a “definitive solution” on U.S.-Brazil trade could come within days.

Robusta coffee is under pressure from rising Vietnamese supplies. The Vietnam National Statistics Office reported on October 13 that the country’s coffee exports for January–September 2025 rose 10.9% year-over-year to 1.230 million metric tons. Vietnam’s 2025/26 coffee production is forecast to climb 6% year-over-year to 1.76 million metric tons, or 29.4 million bags—the highest in four years. The Vietnam Coffee and Cocoa Association (Vicofa) said on October 24 that output in 2025/26 could be 10% above the prior year if weather conditions remain favorable. Vietnam is the world’s top robusta producer.

Stronger export volumes are weighing on prices. The International Coffee Organization reported on October 6 that global coffee exports for the current marketing year (October–August) rose 0.2% year-over-year to 127.92 million bags, signaling ample supply.

Conab, Brazil’s crop forecasting agency, cut its 2025 arabica crop estimate on September 4 by 4.9% to 35.2 million bags, down from a May forecast of 37.0 million bags. The agency also trimmed its total Brazil 2025 coffee production estimate by 0.9% to 55.2 million bags from 55.7 million bags.

The USDA’s Foreign Agricultural Service projected on June 25 that world coffee production in 2025/26 will rise 2.5% year-over-year to a record 178.68 million bags, with arabica output falling 1.7% to 97.022 million bags and robusta rising 7.9% to 81.658 million bags. Brazil’s 2025/26 production is forecast to increase 0.5% to 65 million bags, while Vietnam’s output is expected to gain 6.9% to 31 million bags. Ending stocks for 2025/26 are projected to climb 4.9% to 22.819 million bags from 21.752 million bags in 2024/25.

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