March arabica coffee (KCH26) on Monday closed up +3.30 (+1.11%), and March ICE robusta coffee (RMH26) closed up +79 (+2.10%).
Coffee prices recovered from early losses on Monday and settled higher after the Brazilian real (^USDBRL) jumped to a 1-week high against the dollar, discouraging export sales from Brazil's coffee producers.
Also, smaller coffee supplies from Colombia, the world's second-largest arabica producer, gave prices a lift when Colombia's National Federation of Coffee Growers reported that Colombia's January coffee production fell -34% y/y to 893,000 bags.
Coffee prices initially moved lower on Monday, with arabica falling to a 6-month low, as concerns over dry conditions in Brazil eased further when Somar Meteorologia reported that Brazil's largest arabica coffee-growing area, Minas Gerais, received 72.6 mm of rain during the week ended February 6, or 113% of the historical average.
Coffee prices have been under pressure over the past 1.5 weeks, with robusta falling to a 5.75-month low last Thursday on signs of robust coffee supplies. Â Conab, Brazil's crop forecasting agency, said last Thursday that Brazil's 2026 coffee production will climb +17.2% y/y to a record 66.2 million bags, with arabica production up +23.2% y/y to 44.1 million bags and robusta production up +6.3% y/y to 22.1 million bags.
Soaring coffee exports from Vietnam, the world's largest robusta producer, are bearish for robusta prices. Â Vietnam's National Statistics Office reported Friday that Vietnam's Jan coffee exports surged +38.3% y/y to 198,000 MT. Â Vietnam's 2025 coffee exports jumped by +17.5% y/y to 1.58 MMT. Â
Increased Vietnamese coffee supplies are negative for prices. Â Vietnam'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. Â
The recovery in ICE coffee inventories is negative for prices. Â ICE-monitored arabica inventories fell to a 1.75-year low of 396,513 bags on November 18, but recovered to a 3.25-month high of 461,829 bags on January 7. Â Also, ICE robusta coffee inventories fell to a 13-month low of 4,012 lots on December 10 but recovered to a 2-month high of 4,662 lots on January 26.
On the positive side for coffee, Brazil's Trade Ministry reported last Thursday that Brazil's Jan coffee exports fell -42.4% y/y to 141,000 MT.
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.
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. Â FAS 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. Â FAS forecasts that 2025/26 ending stocks will fall by -5.4% to 20.148 million bags from 21.307 million bags in 2024/25.
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On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
