Coffee Prices Hit Multi-Week Lows Thanks To Increased Supply – CoffeeTalk

Coffee prices have sharply dropped on Wednesday, with Arabica posting a 3-week low and robusta posting a 5-week low due to increased supply and doubts about demand. The USDA forecasted that 2025/26 coffee production in Honduras would climb +5.1% y/y to 5.8 million bags, while consulting firm Safras & Mercado raised its Brazil 2025/26 coffee production estimate to 65.51 million bags from an earlier estimate of 62.45 million bags. Brazil’s crop forecasting agency Conab raised its Brazil 2025 coffee production estimate to 55.7 million bags from a January estimate of 51.81 million bags.

The coffee inventory situation has also improved, which is a bearish price factor. ICE-monitored robusta coffee inventories rose to a 7-1/2 month high Wednesday of 4,626 lots, and ICE-monitored arabica coffee inventories rose to a 2-3/4 month high last Wednesday of 844,473 bags. Demand concerns are bearish for coffee prices, as several global commodity importers, including Starbucks, Hershey, and Mondelez International, recently said the US’s baseline 10% tariff on imports would raise prices and further pressure sales volumes.

Signs of smaller coffee exports from Brazil are supportive for coffee prices, as exporter group Cecafe reported that Brazil’s April green coffee exports fell -28% y/y to 3.05 million bags and Jan-Apr coffee exports are down -15.5% y/y to 13.186 million bags. Concerns about a smaller Brazilian coffee crop have supported coffee prices, as Rabobank predicted Brazil’s 2025/26 arabica coffee crop would fall -13.6% y/y to 38.1 million bags, citing dry weather in key arabica-growing areas that significantly reduced flowering of coffee trees.

Robusta coffee found support last Tuesday when Vietnam’s National Statistics Office reported that Vietnam’s 2025 Jan-Apr coffee exports were down -9.8% y/y to 663,000 MT. Robusta coffee has support from reduced robusta production, as 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, with the FAS projecting 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.

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