Prospect Of A Record Crop In Brazil Send Coffee Prices To Half-Year Low – CoffeeTalk

March arabica coffee futures (KCH26) fell by 5.23% to reach a price of -15.70, while March ICE robusta coffee (RMH26) decreased by 5.14%, down -198 points. Current coffee prices are experiencing a decline, with arabica hitting a 7.25-month low and robusta at a 6-month low, primarily influenced by expectations of a record Brazilian coffee harvest. On February 5, Brazil’s Conab agency projected a 17.2% year-on-year increase in Brazil’s 2026 coffee production to a record 66.2 million bags. This includes a 23.2% rise in arabica to 44.1 million bags and a 6.3% increase in robusta to 22.1 million bags.

Additionally, favorable rainfall in Brazil, particularly in Minas Gerais—a key arabica-producing region—has bolstered the crop outlook, receiving 72.6 mm of rain, which is 113% of its historical average during the week ending February 6. Compounding the bearish trend for robusta prices is a significant increase in coffee exports from Vietnam, the leading robusta producer. Vietnam’s coffee exports in January surged by 38.3% year-on-year to 198,000 metric tons, and the projections for 2025 indicate a substantial 17.5% increase to 1.58 million metric tons.

In contrast, the recovery of coffee inventories at ICE poses additional downward pressure on prices. Arabica inventories, which dropped to a 1.75-year low of 396,513 bags on November 18, rebounded to a 3.25-month high of 461,829 bags by January 7. Similarly, robusta inventories fell to a 13-month low of 4,012 lots on December 10 before recovering to a 2-month high of 4,662 lots by January 26.

On a more positive note, Brazil’s Trade Ministry reported a 42.4% decline in coffee exports in January, totaling 141,000 metric tons. In Colombia, smaller coffee supplies are supportive for prices as production dropped 34% year-on-year in January to 893,000 bags, being the second-largest arabica producer after Brazil. The International Coffee Organization indicated tighter global coffee supplies, reporting a slight 0.3% year-on-year decline in global coffee exports for the current marketing year (October-September) to 138.658 million bags.

The USDA’s Foreign Agricultural Service (FAS) forecasted a 2.0% rise in world coffee production for 2025/26 to a record 178.848 million bags, despite a projected decrease in arabica production of 4.7% to 95.515 million bags. Conversely, robusta production is expected to increase by 10.9% to 83.333 million bags. Brazil’s coffee production is anticipated to fall by 3.1% to 63 million bags for 2025/26, while Vietnam’s coffee output is projected to hit a four-year high of 30.8 million bags with a 6.2% year-on-year increase. Ending stocks for 2025/26 are expected to decrease by 5.4% from the previous year, dropping from 21.307 million bags to 20.148 million bags.

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