Coffee Prices Slide as Market Pressures Accelerate

Coffee prices are tumbling, with arabica and robusta dropping over 3% to two-month lows. A risk-off mood in asset markets and fears of tariffs hiking consumer costs are dragging down commodities, including coffee. The Brazilian real’s recent slide against the dollar has also spurred export sales from Brazil, the top arabica producer, accelerating the decline.

Despite easing drought concerns after above-average rainfall in Brazil’s key coffee region, supply worries linger. Brazil’s coffee exports fell sharply in February, and forecasts predict a 2025/26 crop decline to a three-year low. Tight inventories—arabica at a 1.5-month low and robusta at a three-week low—offer some support, though a projected robusta surplus from Vietnam and Brazil in 2025/26 is bearish. Last year’s El Niño drought still threatens long-term yields in Brazil and Colombia, the second-largest arabica grower.

Global export trends are mixed: Brazil’s 2024 shipments hit a record, but worldwide exports dipped late last year. The USDA forecasts higher 2024/25 production but shrinking stocks, while a key trader slashed Brazil’s 2025/26 arabica outlook, citing drought damage, and sees a fifth year of global deficits. With currency shifts, weather woes, and supply swings at play, coffee prices remain in a volatile brew.