Arabica Coffee from Brazil and Vietnam: How Geographic Origins Shape Global Supply and Prices

The arabica coffee market is intricately tied to its geographic origins, with Brazil and Vietnam serving as the two dominant producers shaping global supply dynamics and price movements. On Thursday, March arabica futures closed with a modest 0.20-point gain (+0.06%), reflecting the complex interplay of currency movements, weather patterns, and shifting export volumes from the world’s largest producing regions. Understanding where arabica coffee comes from is essential to decoding the market signals that drive price recovery or decline.

Why Brazil and Vietnam Matter for Arabica and Robusta Supply

Arabica coffee originates primarily from Brazil, which accounts for the largest share of global arabica production, followed by other tropical regions. Separately, Vietnam dominates robusta coffee production, a different species with distinct geographic origins. This geographic concentration creates vulnerability in global supply chains. Brazil’s Minas Gerais region—the nation’s largest arabica coffee-growing area—receives close scrutiny from traders because weather disruptions there have outsized impacts on worldwide arabica prices.

On Thursday, March robusta futures settled down 0.52 points (-1.28%), underperforming arabica as the two species respond differently to their respective origin regions’ conditions. Vietnam, the world’s largest robusta producer, saw 2025 coffee exports surge 17.5% year-over-year to 1.58 million metric tons, demonstrating how robust harvests from that origin support lower robusta prices. Conversely, arabica coffee from Brazil faced headwinds from export declines, creating divergent price action between the two varieties.

Brazilian Real’s Rally Fuels Arabica Futures Short Covering

The Brazilian real’s appreciation to a 2.25-month high against the dollar triggered sharp short covering in arabica futures, lifting prices off their morning lows. A stronger real makes arabica coffee exported from Brazil more expensive for international buyers, discouraging sales and supporting futures prices through technical buying. This currency effect demonstrates how the geographic origin of arabica coffee creation is tied not just to physical supply, but to financial market dynamics affecting the producing nation’s economy.

The rally illustrated classic commodity market mechanics: when the currency of a major producing region strengthens, traders reduce short positions as export demand weakens, creating upward price pressure in futures markets. This dynamic remains a key factor influencing how arabica coffee from its primary origins—especially Brazil—performs in global markets.

Divergent Supply Trends: Brazilian Exports Slide While Vietnamese Output Climbs

The supply picture for arabica coffee from different origins has become increasingly bifurcated. Cecafe reported that Brazil’s total December green coffee exports fell 18.4% to 2.86 million bags, with arabica coffee exports specifically down 10% year-over-year to 2.6 million bags. This contraction in arabica coffee supplies from Brazil, the origin of roughly one-third of global production, introduces fundamental support for prices.

By contrast, Vietnam’s coffee output continues climbing. Vietnam’s 2025/26 coffee production is projected to rise 6% year-over-year to 1.76 million metric tons (29.4 million bags), a 4-year high. The Vietnam Coffee and Cocoa Association noted in October that output could be 10% higher than the previous crop if weather cooperates. This production surge from Vietnam’s origin as the world’s robusta leader is pressuring robusta prices but has secondary effects on arabica futures through supply substitution dynamics.

Climate and Inventory Pressures Complicate the Arabica Coffee Picture

Weather in arabica’s primary growing regions remains a critical variable. The Weather Channel forecasted showers every day the previous week in Minas Gerais, Brazil’s largest arabica coffee-growing region—an origin area that supplies a disproportionate share of global arabica. However, earlier data showed that Minas Gerais received only 33.9 mm of rain during the week ended January 16, or 53% of the historical average, suggesting below-average rainfall may support prices by constraining future arabica supply from this key origin.

ICE inventories for arabica coffee have recovered from depressed levels, creating headwinds for prices. While arabica inventories hit a 1.75-year low of 398,645 bags on November 20, they rebounded to a 2.5-month high of 461,829 bags by last Wednesday. Similarly, robusta inventories fell to a 1-year low of 4,012 lots on December 10 before rising to 4,532 lots by Thursday. Rising inventories of arabica coffee, despite the geographical concentration of supply from Brazil, suggest adequate buffer stocks may cap upside price movement.

Production Forecasts Signal Mixed Signals for 2025/26

The outlook for arabica coffee from its primary origins remains complex. Brazil’s 2025/26 coffee production is forecast to decline 3.1% year-over-year to 63 million bags by the USDA’s Foreign Agriculture Service, potentially supporting arabica prices due to reduced supplies from this origin. However, globally, world coffee production in 2025/26 is projected to increase 2.0% year-over-year to a record 178.848 million bags.

The production mix matters significantly. Arabica production faces headwinds, declining 4.7% to 95.515 million bags, while robusta output surges 10.9% to 83.333 million bags. This shift reflects the geographic reality that robusta originates predominantly from Vietnam and other Southeast Asian producers ramping production, while arabica’s origins in Brazil and other regions face supply constraints. The International Coffee Organization reported that global coffee exports for the current marketing year (Oct-Sep) fell just 0.3% year-over-year to 138.658 million bags, suggesting tight underlying fundamentals despite the robusta surplus.

Where arabica coffee comes from—primarily Brazil supplemented by origins in other tropical regions—will continue determining whether price recovery gains can be sustained in the face of rising global production and slowly rebuilding inventories.