Coffee Prices Come Down As Brazil And Vietnam See Ease In Dry Weather – CoffeeTalk

Coffee prices have tumbled as dryness concerns ease in Brazil and Vietnam. May arabica coffee (KCK25) is down -11.90 (-3.04%), while May ICE robusta coffee (RMK25) is down -109 (-2.00%). This week’s gains were due to weather concerns in Brazil and Vietnam, with Cooxupe, Brazil’s largest arabica coffee co-operative, predicting high temperatures and below-normal rainfall last month to negatively affect coffee yields this year. The Dak Lak weather office also predicted more hot weather and less rainfall for the March 21-31 period in Vietnam’s main coffee-producing region, Central Highlands.

Recent higher-than-normal rainfall in Brazil eased dry conditions and was negative for prices. Somar Meteorologia reported that Brazil’s biggest arabica coffee growing area of Minas Gerais received 31.2 mm of rain in the week ended March 22, or 102% of the historical average. Supply fears are supporting coffee prices, with Cecafe reporting that Brazil’s February green coffee exports fell -12% y/y to 3 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.

The current coffee inventory situation is mixed, with ICE-monitored robusta coffee inventories rising to a 7-week high Tuesday of 4,414 lots, and ICE-monitored arabica coffee inventories falling to a 1-month low last Friday of 777,708 bags. Marex Solutions expects the global coffee surplus in the 2025/26 season to widen to 1.2 million bags from +200,000 bags in the 2024/25 season.

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 flowering stage and reducing the prospects for Brazil’s 2025/26 arabica coffee crop. Colombia, the world’s second-largest arabica producer, is slowly recovering from the El Nino-spurred drought last year.

Robusta coffee prices are underpinned by reduced robusta production, with Vietnam’s coffee production dropping by -20% to 1.472 MMT due to drought. The USDA’s biannual report on December 18 was mixed for coffee prices, with the FAS projecting a +4.0% y/y increase in world coffee production in 2024/25, a +1.5% increase in arabica production, and a +7.5% increase in robusta production.

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