Global Coffee Supply Surge Sends Prices Tumbling—Here's What the Data Shows

The coffee market took a sharp hit this week as traders recalibrated their outlook on abundant worldwide coffee supplies. March arabica futures slumped 2.28% to close down 8.20 points, while January robusta contracts dropped 2.65%, falling 107 points. Both benchmarks extended a two-week downtrend, with arabica hitting a 3-week trough and robusta sinking to a 4-month low.

Why Coffee Supplies Are Weighing Heavy on Prices

The primary driver is unmistakable: ample supplies on the horizon. Brazil’s crop forecasting agency, Conab, raised its 2025 production estimate by 2.4% to 56.54 million bags (up from 55.20 million bags projected in September). Simultaneously, favorable weather patterns—particularly intense rainfall across Brazil’s coffee-growing regions—have eased crop concerns and reinforced the bullish supply narrative.

The numbers paint a clear picture. Minas Gerais, Brazil’s top arabica-producing region, received 79.8 mm of rain during the week ending December 12, representing 155% of historical precipitation averages. Climatempo meteorologists flagged that concentrated, persistent rainfall is expected to continue throughout the week, further boosting supply confidence.

Vietnam Amplifies the Global Coffee Supply Picture

Vietnam’s export data adds another layer of pressure. The country’s November coffee exports surged 39% year-over-year to 88,000 MT, with January-through-November shipments climbing 14.8% y/y to 1.398 million MT. Looking ahead, Vietnam’s 2025/26 coffee production is projected to climb 6% year-over-year to 1.76 million MT—or roughly 29.4 million bags—marking a 4-year production high.

The Vietnam Coffee and Cocoa Association underscored this outlook, projecting that 2025/26 output could run 10% above the prior crop year if weather stays favorable. As the world’s largest robusta producer, Vietnam’s rising output keeps robusta prices under sustained pressure despite current price levels.

Global Supply Forecasts Point Firmly Upward

The USDA’s Foreign Agriculture Service offered a comprehensive 2025/26 outlook: world coffee production is expected to climb 2.5% year-over-year to a record 178.68 million bags. While arabica output faces a slight 1.7% contraction to 97.022 million bags, robusta production is set to expand 7.9% to 81.658 million bags. Brazil’s contribution is expected to rise just 0.5% to 65 million bags, while Vietnam’s harvest should jump 6.9% to an exceptional 31 million bags.

Ending stocks for 2025/26 are forecasted to climb 4.9% to 22.819 million bags versus 21.752 million bags in 2024/25—signaling an increasingly comfortable supply environment.

Inventory Pressures and Mixed Support Signals

ICE-monitored arabica inventories dipped to a 1.75-year low of 398,645 bags on November 20, though they rebounded to a 5-week high of 426,523 bags by December 5. Robusta stocks sank to an 11.5-month floor of 4,012 lots last week, suggesting some near-term tightness. However, these inventory dynamics pale against the backdrop of robust global coffee supplies expected to materialize.

Brazil’s green coffee exports fell 27% year-over-year in November, dropping to 3.3 million bags—a modest headwind that hasn’t offset the broader supply tailwinds. US purchases of Brazilian coffee from August through October plummeted 52% year-over-year to 983,970 bags, reflecting earlier tariff uncertainty. Although those tariffs have since eased, US coffee inventories remain relatively lean.

The Bottom Line

Coffee prices are realigning with the reality of robust global coffee supplies coming online. Whether through Brazil’s bumper crop forecasts, Vietnam’s expanding robusta production, or global stockpile projections climbing higher, the supply narrative has overwhelmed near-term inventory tightness. Traders betting on coffee prices should monitor these supply dynamics closely as the 2025/26 crop year unfolds.