Arabica Coffee Prices Fall Back After Increased Inventory Wednesday – CoffeeTalk

Arabica coffee prices fell on Wednesday due to a sharp drop in ICE-monitored arabica coffee inventories, which dropped by -8.0% to a 9-month low of 758,514 bags. However, arabica inventories rebounded by 2.1% to 774,553 bags on Wednesday. Robusta coffee inventories also recovered slightly to 4,355 lots on Wednesday.

An increased percentage of Brazil’s coffee harvest has already been sold compared with previous years, meaning there is less supply still available to sell. Safras & Mercado reported that producers sold 88% of Brazil’s 2024/25 coffee harvest as of February 11, faster than last year’s comparable year-earlier figure of 79% and the 5-year average of 82%. Meanwhile, sales of the 2025/26 crop have been slow at 13% of the crop, well behind the 4-year average of 22%.

Coffee prices have support from continued supply fears. Cecafe reported that Brazil’s January green coffee exports fell -1.6% y/y to 3.98 million bags. Conab, Brazil’s government crop forecasting agency, forecasted that Brazil’s 2025/26 coffee crop would fall -4.4% y/y to a 3-year low of 51.81 million bags. Conab also cut its 2024 Brazil coffee crop estimate by -1.1% to 54.2 million bags from a September estimate of 54.8 million bags.

Below-normal rain in Brazil has heightened coffee crop concerns and is supporting coffee prices after Somar Meteorologia reported that Brazil’s biggest arabica coffee growing area of Minas Gerais received 12.4 mm of rain last week, or 20% of the historical average. The impact of dry El Nino weather last year may lead to longer-term coffee crop damage in South and Central America. Rainfall in Brazil has consistently been below average since last April, damaging coffee trees during the all-important flowering stage and reducing the prospects for Brazil’s 2025/26 arabica coffee crop.

Robusta coffee prices are underpinned by reduced robusta production. Vietnam’s coffee production in the 2023/24 crop year dropped by -20% to 1.472 MMT, the smallest crop in four years. The USDA’s biannual report on December 18 was mixed for coffee prices. The USDA’s Foreign Agriculture Service (FAS) projected that world coffee production in 2024/25 will increase +4.0% y/y to 174.855 million bags, with a +1.5% increase in arabica production to 97.845 million bags and a +7.5% increase in robusta production to 77.01 million bags. The FAS forecasts that 2024/25 ending stocks will fall by -6.6% to a 25-year low of 20.867 million bags from 22.347 million bags in 2023/24.

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