Barchart Coffee Prices Analysis: Why March Futures Retreated on Brazil Weather Forecast

According to Barchart’s commodity market analysis, coffee prices experienced significant declines this week, with March arabica futures (KCH26) falling -13.25 points (-3.845%) and March robusta futures (RMH26) dropping -66 points (-1.58%). These retreats pushed arabica to a 5.5-month low and robusta to its lowest level in 3.5 weeks. The downward pressure on coffee prices stems from multiple factors spanning weather forecasts, global supply dynamics, and inventory developments.

Arabica and Robusta Retreat to Multi-Month Lows

The coffee complex weakness reflects growing bearish sentiment in the market. Arabica, produced primarily in Brazil, faced particular selling pressure as traders absorbed forecasts of sustained rainfall across Minas Gerais, Brazil’s largest coffee-growing region, over the coming week. Robusta, dominated by Vietnam’s supply, declined amid broader softness in the commodities complex and expectations of abundant global coffee supplies.

These price lows signal market participants are pricing in a more bearish outlook for both coffee varieties in the near term. The simultaneous weakness in both arabica and robusta demonstrates how global coffee markets increasingly move together, despite their geographic and botanical differences.

Brazil’s Minas Gerais Rainfall Forecast Pressures Coffee Markets

Brazil, the world’s largest arabica producer, has become the focal point of coffee market attention due to weather developments. Recent rainfall forecasts for Minas Gerais prompted significant selling, as adequate moisture supports crop development and suggests favorable production conditions ahead.

This bullish outlook for supply has overwhelmed any near-term concerns about crop stress. In December, Brazil’s crop forecasting agency Conab elevated its total 2025 coffee production estimate by 2.4% to 56.54 million bags, up from a September projection of 55.20 million bags. Additionally, Brazil’s total green coffee exports fell sharply in recent reporting, declining -18.4% to 2.86 million bags, with arabica exports down -10% year-over-year to 2.6 million bags. However, these export declines pale against the negative impact of rising production expectations on prices.

Vietnam’s Rising Robusta Production and Exports Weigh on Prices

Vietnam, the world’s largest robusta producer, continues to expand its coffee supply to global markets, creating structural headwinds for robusta futures. Vietnam’s 2025 coffee exports surged +17.5% year-over-year to 1.58 million metric tons, according to the National Statistics Office. Looking ahead, Vietnam’s coffee production for 2025/26 is projected to climb +6% year-over-year to 1.76 million metric tons, or approximately 29.4 million bags—a 4-year production high.

The Vietnam Coffee and Cocoa Association (Vicofa) has indicated that output could reach 10% above the previous crop year if weather remains favorable. This expansion in Vietnamese robusta supplies has created persistent downward pressure on robusta futures prices, limiting upside potential for the coffee complex overall.

Global Coffee Supply Outlook and Inventory Dynamics

Beyond regional supply developments, global coffee inventories have recovered from recent lows, adding to bearish sentiment. ICE-monitored arabica inventories, which fell to a 1.75-year low of 398,645 bags in November, rebounded to a 2.5-month high of 461,829 bags in mid-January. Similarly, ICE robusta inventories bottomed at a 1-year low of 4,012 lots in December but recovered to a 1.75-month high of 4,609 lots recently.

The International Coffee Organization (ICO) reported in November that global coffee exports for the current marketing year declined -0.3% year-over-year to 138.658 million bags, suggesting tight near-term supply dynamics have already been factored into recent price action. However, longer-term supply projections paint a different picture.

The USDA’s Foreign Agriculture Service (FAS) projects that world coffee production in 2025/26 will increase +2.0% year-over-year to a record 178.848 million bags. Within this aggregate, arabica production is expected to decline -4.7% to 95.515 million bags, while robusta output rises +10.9% to 83.333 million bags. This shift toward robusta reinforces downward pressure on the coffee complex, particularly robusta prices.

FAS forecasted that Brazil’s 2025/26 production will fall -3.1% year-over-year to 63 million bags, while Vietnam’s 2025/26 output is expected to rise +6.2% year-over-year to 30.8 million bags—a 4-year high. Critically, FAS projects 2025/26 ending coffee stocks will decline -5.4% to 20.148 million bags from 21.307 million bags in the prior year, but this tightening appears insufficient to offset the production gains in Vietnam and rising global supplies.

Barchart’s commodity analysis indicates that coffee prices face structural headwinds from ample global supplies and rising export volumes, particularly from Vietnam. While weather in Brazil warrants continued monitoring, the consensus expectation for robust harvests globally continues to weigh on the upside for coffee futures across both arabica and robusta contracts.