As The Dollar Falls, Coffee Prices Rise – CoffeeTalk

Coffee prices have been impacted by the dollar’s fall, with robusta coffee recovering from a 13-1/4 month low. The slide in the dollar index to a 3-1-4 year low has sparked short covering in coffee futures. Gains in robusta coffee prices accelerated today on signs of smaller supplies after ICE-monitored robusta coffee inventories fell to a 5-week low of 5,108 lots.

Coffee prices have been under pressure over the past seven weeks due to concerns about higher coffee production and ample supplies. Brazil’s ongoing coffee harvest is weighing on prices, with Safras & Mercado reporting that Brazil’s 2025/26 coffee harvest was 35% complete as of June 11, slightly behind last year’s comparable level of 37% but in line with the 5-year average of 35%. Brazil’s arabica harvest has been slowed by heavy rain in some areas.

Below-normal rainfall in Brazil is supportive for coffee prices, as Brazil’s largest arabica coffee-growing area, Minas Gerais, received no rain during the week ended June 21. The USDA’s Foreign Agricultural Service (FAS) forecast that Brazil’s 2025/26 coffee production will increase by 0.5% year-over-year to 65 million bags and that Vietnam’s 2025/26 coffee output will rise by 6.9% y/y to a 4-year high of 31 million bags.

ICE-monitored arabica coffee inventories rose to a 4-3-5/4 month high of 892,468 bags on May 27 and were modestly below that high at 854,2068 bags as of Wednesday. Smaller coffee exports from Brazil are bullish for prices, as Cecafe reported that Brazil’s May green coffee exports fell by -36% y/y to 2.8 million bags.

Due to drought, Vietnam’s coffee production in the 2023/24 crop year decreased by 20% to 1.472 MMT, the smallest crop in four years. The Vietnam Coffee and Cocoa Association cut its 2024/25 Vietnam coffee production estimate to 26.5 million bags from a December estimate of 28 million bags.

The USDA’s biannual report was bearish for coffee prices, with a projected increase in world coffee production in 2025/26 to a record 178.68 million bags, a decrease in arabica production to 97.022 million bags, and an increase in robusta production to 81.658 million bags.

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