Robusta Coffee Futures Bounce Back on Brazil Export Woes Despite Record Production Surge

The coffee futures market delivered a mixed performance this week as conflicting supply narratives created volatile trading conditions. March arabica contracts closed slightly lower at -0.25 (-0.08%), while March robusta coffee futures rallied sharply, ending +61 (+1.62%) and recouping earlier losses. This divergence underscores a market caught between bullish production news and bearish export realities—a classic tension that professional traders and commodity analysts on Barchart track closely when navigating coffee’s complex supply-demand dynamics.

Brazil’s Record Output Collides with Export Weakness

Brazil’s crop forecasting agency Conab announced Thursday that the country’s 2026 coffee production will surge +17.2% year-over-year to an unprecedented 66.2 million bags. More specifically, arabica production is forecast to jump +23.2% to 44.1 million bags, while robusta output will climb +6.3% to 22.1 million bags. Such dramatic growth numbers would typically be deeply bearish for prices, flooding the market with supply and pressuring both arabica and robusta coffee futures lower.

However, the export data told a starkly different story. Brazil’s Trade Ministry revealed Thursday that January coffee exports plummeted -42.4% year-over-year to just 141,000 MT—a sharp contraction that caught traders off guard and triggered short-covering activity in robusta coffee futures. This unexpected weakness in outbound shipments signals potential logistical or commercial constraints that could tighten near-term availability, despite the production boost on the horizon.

Weather Relief in Brazil Offsets Supply Abundance Concerns

Contributing to the bearish sentiment around ample supplies, Brazil has received above-average rainfall that eased earlier dryness concerns. Somar Meteorologia reported Monday that Minas Gerais, Brazil’s largest arabica coffee-growing region, received 69.8 mm of rainfall during the week ending January 30—representing 117% of the historical average. This moisture is supportive for crop development but negative for prices in a market already wrestling with oversupply expectations.

Vietnamese Robusta Exports Create Structural Headwinds

Vietnam’s role as the world’s largest robusta producer has taken on heightened significance as export momentum accelerates. Vietnam’s National Statistics Office reported that 2025 coffee exports jumped +17.5% year-over-year to 1.58 million MT, intensifying competition in global robusta coffee futures markets. Looking ahead, Vietnam’s production for 2025/26 is projected to climb +6% to 1.76 MMT (29.4 million bags), marking a 4-year high.

The Vietnam Coffee and Cocoa Association further amplified supply expectations, stating on October 24 that Vietnam’s 2025/26 coffee output will be 10% higher than the prior crop year if weather remains favorable. This cascading flow of Vietnamese robusta onto global markets undercuts price recovery efforts and weighs heavily on robusta coffee futures valuations.

Storage Levels Provide Mixed Signals on Tightness

The recovery in ICE-monitored coffee inventories presents a complicated picture for near-term price support. Arabica inventories had fallen to a 1.75-year low of 396,513 bags on November 18 but subsequently recovered to a 3.25-month high of 461,829 bags by January 7. Similarly, robusta inventory levels dipped to a 13-month low of 4,012 lots on December 10, then rebounded to a 2-month high of 4,662 lots last Monday.

This inventory rebound is generally bearish for commodity prices, as rising storage supplies diminish supply urgency and reduce the premium for immediate delivery. Traders monitoring robusta coffee futures through Barchart’s commodity analysis observe that these inventory trends will likely persist as new crops come to market.

Global Production Forecasts and Long-Term Market Structure

Despite regional production surges in Brazil and Vietnam, the International Coffee Organization reported on November 7 that global coffee exports for the current marketing year (October-September) declined -0.3% year-over-year to 138.658 million bags—a modest contraction that partially supports the bull case.

The USDA’s Foreign Agriculture Service released a more expansive outlook on December 18, projecting that world coffee production in 2025/26 will increase +2.0% to a record 178.848 million bags. This forecast incorporated a -4.7% decrease in arabica production to 95.515 million bags offset by a robust +10.9% increase in robusta to 83.333 million bags. FAS specifically projected Brazil’s 2025/26 production declining -3.1% to 63 million bags (a step-down from 2024/25), while Vietnam’s output will rise 6.2% to 30.8 million bags.

The critical metric for coffee futures traders is the ending stocks projection: FAS forecasted 2025/26 ending stocks will fall -5.4% to 20.148 million bags from 21.307 million bags in 2024/25. This modest decline, while not dramatic, suggests that global supply management will remain a factor for robusta coffee futures and arabica markets throughout the season.

The week’s mixed price action ultimately reflects this fundamental tug-of-war—record production potential clashing with near-term export disruptions and inventory building. For investors using Barchart’s commodity analysis framework, the robusta coffee futures rebound on export news demonstrates how tactical supply shocks can override structural oversupply narratives, at least in the short term.