Today Coffee Price Surges: Brazil Drought Pushes Arabica to 4-Week High

Today coffee price hit four-week highs with arabica up 0.17% and robusta up 0.48%. Brazil’s Minas Gerais received only 67% normal rainfall, threatening production. Stronger Brazilian real and ICE stocks at 1.75-year lows support prices. US tariffs cut Brazilian imports 52%, but Vietnam’s 17.5% export surge may pressure prices lower.

Brazil Drought Drives Today Coffee Price Rally

Today, coffee prices are climbing, with arabica reaching its highest level in four weeks. The upward momentum is fueled by insufficient rainfall in Brazil, the leading producer of arabica beans. According to Somar Meteorologia, the Minas Gerais region, Brazil’s primary arabica-growing area, received just 47.9 mm of rain in the week ending January 2—only 67% of its usual average.

This rainfall deficit couldn’t come at worse time for coffee production. The current period represents critical development phase for coffee cherries that will be harvested later in 2026. Adequate moisture during this stage determines bean size, quality, and overall yield. When rainfall falls 33% below normal, stress on coffee plants increases, potentially reducing production or degrading quality even if subsequent rains improve.

Additionally, a stronger Brazilian real, which hit a one-month peak against the US dollar, is making Brazilian coffee exports less attractive, further supporting arabica prices. When Brazil’s currency strengthens, coffee becomes more expensive for international buyers paying in dollars, euros, or other currencies. This currency effect reduces demand for Brazilian beans, tightening global supply and pushing today coffee price higher.

Key Factors Supporting Today Coffee Price

Rainfall Deficit: Minas Gerais received only 67% of normal precipitation

Currency Strength: Brazilian real at one-month high versus USD reduces export competitiveness

Inventory Decline: ICE arabica stocks fell to 1.75-year low of 398,645 bags

US Import Reduction: Tariffs slashed Brazilian imports 52% creating supply gaps

The combination of weather concerns and currency headwinds creates near-term bullish environment for arabica prices. Traders monitoring today coffee price should watch Brazilian weather forecasts closely, as return to normal rainfall patterns would alleviate immediate supply concerns and potentially trigger price corrections.

Robusta vs Arabica: The Tale of Two Markets

Robusta coffee prices are seeing only slight gains, as Vietnam—currently the top robusta exporter—has significantly increased its shipments. The National Statistics Office of Vietnam reported a 17.5% year-over-year jump in coffee exports for 2025, reaching 1.58 million metric tons. This abundant supply from Vietnam keeps robusta prices relatively subdued compared to arabica’s rally.

The arabica-robusta split in today coffee price performance reflects fundamental supply differences. While Brazil’s arabica production faces drought threats, Vietnam’s robusta production benefits from favorable growing conditions. This divergence creates opportunities for roasters and consumers to substitute robusta for arabica in blends, partially offsetting arabica price increases.

However, quality differences limit substitution potential. Arabica commands premium pricing due to superior flavor profiles preferred by specialty coffee markets. Robusta’s higher caffeine content and more bitter taste make it suitable for instant coffee and lower-grade blends, but direct substitution in premium markets faces consumer resistance. This quality segmentation means arabica shortages don’t automatically translate to equivalent robusta demand increases.

Inventory Levels: Support and Resistance for Prices

Declining inventories at ICE-monitored warehouses are lending support to today coffee price. Arabica stocks tracked by ICE dropped to a 1.75-year low of 398,645 bags on November 20, before rebounding to a 2.5-month high of 461,829 bags. Robusta inventories also hit a one-year low of 4,012 lots on December 10, but later climbed to a five-week high of 4,278 lots by late December.

The V-shaped recovery in arabica inventories from November lows to December highs suggests market found equilibrium. Low inventory levels triggered buying from roasters concerned about supply security, replenishing stocks and stabilizing markets. This restocking activity contributed to today coffee price rally while preventing runaway price spikes that would destroy demand.

Previously, US buyers reduced purchases of Brazilian coffee due to steep tariffs on imports from Brazil. While these tariffs have since been lowered, US coffee inventories remain limited. Between August and October, when tariffs were in effect, US imports of Brazilian coffee fell by 52% compared to the same period the previous year, totaling 983,970 bags.

This 52% import reduction created inventory deficit that takes months to replenish. Even with tariffs lowered, US roasters must rebuild safety stocks while competing with other global buyers for limited Brazilian supplies. This restocking demand provides floor under today coffee price, as US buyers accept higher prices to secure needed supplies.

Bearish Factors: Production Forecasts Pressure Prices

Expectations of abundant coffee supplies are putting downward pressure on prices. On December 4, Brazil’s crop forecasting agency Conab raised its estimate for the country’s 2025 coffee harvest by 2.4%, projecting a total of 56.54 million bags—up from the previous estimate of 55.20 million bags in September.

This production upgrade contradicts the drought narrative driving today coffee price higher. If Brazil ultimately produces 56.54 million bags despite current rainfall deficits, concerns about supply shortages will prove overblown. Weather can improve dramatically over coming months, with late rains partially offsetting earlier deficits and enabling better-than-feared harvests.

Rising coffee production in Vietnam is also weighing on prices. Forecasts for the 2025/26 season predict a 6% year-over-year increase to 1.76 million metric tons, or 29.4 million bags—the highest in four years. The Vietnam Coffee and Cocoa Association (Vicofa) indicated that, provided favorable weather continues, the country’s 2025/26 coffee output could be 10% higher than the previous crop year. Vietnam remains the world’s largest robusta coffee producer.

Global Coffee Production Forecasts

Brazil 2025: 56.54 million bags (up 2.4% from previous estimate)

Vietnam 2025/26: 30.8 million bags (up 6.2% to four-year high)

Global 2025/26: 178.848 million bags (up 2% to record levels)

Arabica Output: 95.515 million bags (down 4.7%)

Robusta Output: 83.333 million bags (up 10.9%)

The USDA’s Foreign Agriculture Service (FAS) released its bi-annual report on December 18, projecting global coffee production for 2025/26 to rise by 2% to a record 178.848 million bags. This includes a 4.7% decrease in arabica output to 95.515 million bags, offset by a 10.9% increase in robusta production to 83.333 million bags.

Mixed Signals: ICO Export Data

Global coffee supply trends present mixed signals for today coffee price direction. The International Coffee Organization (ICO) reported that worldwide coffee exports for the current marketing year (October to September) declined by 0.3% year-over-year, totaling 138.658 million bags. This slight decline suggests demand remains robust relative to available supplies, providing support for current price levels.

However, the decline is modest enough that it doesn’t signal severe shortage. A 0.3% reduction in global exports could stem from logistical delays, currency effects, or timing differences rather than fundamental supply constraints. Traders should avoid over-interpreting small percentage changes in export data when forecasting today coffee price trajectories.

The FAS forecast for ending stocks provides crucial context. Ending stocks for 2025/26 are anticipated to fall by 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25. Declining ending stocks indicate consumption is outpacing production, gradually tightening markets. However, 20.148 million bags represents approximately 11% of annual consumption—adequate buffer preventing crisis-level shortages.

Today Coffee Price Outlook: Bull and Bear Scenarios

The bullish case for today coffee price rests on Brazilian weather remaining unfavorable, currency strength continuing to constrain Brazilian exports, ICE inventory levels failing to rebuild substantially, and arabica production declining 4.7% as forecasted. If these factors align, arabica could test multi-year highs, potentially breaking above recent peaks.

The bearish case argues that Brazilian production forecasts of 56.54 million bags materialize despite current drought concerns, Vietnamese robusta exports continue surging and enable arabica substitution in blends, US tariff reductions allow inventory rebuilding reducing urgency, and record global production of 178.848 million bags overwhelms demand. This scenario would pressure today coffee price significantly lower from current elevated levels.

Balanced probability suggests prices remain elevated near-term due to weather uncertainty and inventory tightness, but gradually decline through 2026 as production forecasts materialize and supply pressures ease. Arabica may maintain premiums over robusta given quality preferences, but overall coffee market faces adequate supply preventing sustained shortages.

What This Means For Consumers and Traders

For coffee consumers, today coffee price elevation translates to higher retail prices at cafes and grocery stores. Roasters typically lock in prices through futures contracts, but as these contracts expire and renew at higher spot prices, costs get passed to consumers. Expect continued price increases at Starbucks and other chains if Brazilian weather doesn’t improve.

For commodities traders, the divergence between weather-driven near-term bullishness and production forecast bearishness creates volatility opportunities. Short-term traders might buy weather scares and sell production updates, while longer-term positions require conviction about whether Brazilian drought represents temporary anomaly or emerging structural problem from climate change.

The arabica-robusta spread presents another trading angle. Current wide spread (arabica premium over robusta) reflects supply differences, but mean reversion historically occurs as markets adjust. If the spread reaches extreme levels, opportunities emerge betting on normalization through robusta appreciation or arabica decline.

FAQ

Why is today coffee price rising?

Today coffee price climbs due to Brazil’s Minas Gerais region receiving only 67% of normal rainfall, threatening arabica production. Stronger Brazilian real makes exports less competitive, while ICE arabica stocks hit 1.75-year lows, tightening global supply.

How much did Brazil’s rainfall deficit affect coffee prices?

Brazil’s primary arabica region received just 47.9 mm rainfall versus normal averages, representing 33% deficit. This pushed arabica to four-week highs, though prices remain below all-time peaks as production forecasts still show adequate global supply.

Will today coffee price keep rising?

Mixed signals exist. Bullish factors include Brazilian drought and low inventories. Bearish factors include Vietnam’s 17.5% export surge, Brazil’s revised 56.54 million bag harvest forecast (up 2.4%), and record global production projections of 178.848 million bags.

Why did US tariffs affect coffee prices?

Between August-October, US tariffs on Brazilian coffee reduced imports by 52% to 983,970 bags, depleting US inventories. Although tariffs have since been lowered, restocking demand supports today coffee price as US buyers rebuild safety stocks.

What’s the difference between arabica and robusta coffee?

Arabica offers superior flavor profiles preferred by specialty markets, commanding premium prices. Robusta has higher caffeine content and bitter taste, used mainly for instant coffee. Today coffee price shows arabica up 0.17% versus robusta’s 0.48%, reflecting different supply dynamics.

Should I buy coffee futures based on this report?

Coffee futures carry significant volatility and weather-dependent risk. Near-term bullishness from Brazilian drought faces offset from record global production forecasts and Vietnamese supply surge. Consult commodity trading advisors before taking positions.