Robusta Coffee Price Climbs on Brazil's Currency Strength and Tightening Supplies

Robusta coffee price has surged recently, with traders responding sharply to multiple headwinds converging in the global market. On Tuesday, March arabica futures closed up +11.00 points (+3.09%), while March ICE robusta futures gained +78 points (+1.86%), marking the highest levels for arabica in two weeks. The rally reflects a combination of factors: strengthening Brazilian currency, declining export volumes, and weather-related supply constraints in major producing regions.

Market Rally Driven by Currency Dynamics and Shrinking Shipments

The Brazilian real has emerged as a key price driver, surging to a 20-month high and making coffee exports less attractive for Brazilian producers from a profitability standpoint. When the currency strengthens relative to the U.S. dollar, exporters receive fewer dollars for each unit of their product, discouraging sales activity and supporting prices. This dynamic has proven particularly impactful for arabica coffee, where Brazil dominates global production.

Recent export data underscores the magnitude of the slowdown. Brazil’s December green coffee shipments plummeted by -18.4% to 2.86 million bags, according to Cecafe (Brazil’s coffee export committee). Arabica specifically fell -10% year-over-year to 2.6 million bags, while robusta coffee exports collapsed -61% year-over-year to just 222,147 bags. These sharp declines have supported prices by tightening near-term supply availability.

Brazil’s Rainfall Deficit Tightens Arabica Supplies

Below-average precipitation across Brazil’s primary coffee-growing regions poses additional upside pressure on prices. Minas Gerais, the nation’s largest arabica-producing state and a critical global supply source, received only 33.9 mm of rainfall during the most recent weekly period—just 53% of the historical average according to meteorological data. Dry conditions raise concerns about crop development and future yield potential, creating a supportive backdrop for price movements.

Vietnam’s Record Output Pressures Robusta Markets

Vietnam, which dominates global robusta coffee production, continues to ramp up output despite price rallies. The country’s 2025 coffee exports jumped +17.5% year-over-year to 1.58 million metric tons, according to the National Statistics Office. Looking ahead, Vietnam’s 2025/26 production is projected to climb +6% year-over-year to 1.76 million metric tons (29.4 million bags), marking a 4-year production high. The Vietnam Coffee and Cocoa Association has indicated that production could climb another 10% in 2025/26 if favorable weather persists.

This expanding Vietnamese supply availability creates asymmetric dynamics: while arabica prices benefit from Brazilian tightness, robusta coffee price gains face headwinds from ample Vietnamese supplies. The premium between arabica and robusta contracts reflects these divergent regional supply-and-demand patterns.

ICE Inventories Show Mixed Signals for Future Price Direction

Warehouse stocks monitored by ICE (Intercontinental Exchange) have recovered from recent lows, suggesting some inventory relief but not necessarily abundance. Arabica inventories hit a 1.75-year low of 398,645 bags in November before recovering to 461,829 bags by mid-January—still historically tight but trending upward. Robusta stocks similarly fell to a 1-year low of 4,012 lots in December before rebounding to 4,609 lots in recent sessions.

This partial recovery in inventory levels introduces some caution into the bullish narrative. While absolute levels remain manageable, the upward trajectory may eventually limit explosive price appreciation.

Global Production Forecast Suggests Price Volatility Ahead

The USDA’s Foreign Agriculture Service projects world coffee production will reach a record 178.848 million bags in 2025/26, up +2.0% year-over-year. However, this global expansion masks sharply divergent regional trends: arabica production is forecast to decline -4.7% to 95.515 million bags, while robusta is projected to surge +10.9% to 83.333 million bags.

Brazil’s 2025/26 output is forecast to decline -3.1% year-over-year to 63 million bags, while Vietnam’s harvest is projected to jump +6.2% year-over-year to 30.8 million bags. These supply shifts will likely perpetuate the arabica/robusta spread seen in current robusta coffee price movements. Looking further ahead, ending global coffee stocks are projected to contract -5.4% to 20.148 million bags from 21.307 million bags in the prior season, tightening the market balance.

The convergence of near-term export weakness, production-region rainfall deficits, and modest inventory recovery creates a complex backdrop for coffee traders monitoring both arabica and robusta fundamentals in the weeks ahead.