1. Weekly Price Overview

Rising Vietnam Supply and Higher Brazilian Output Weigh on Global Coffee Prices Despite Weather Risks

In W50 2025, global coffee prices moved lower over the past two weeks as supply-side optimism outweighed weather risks in key producing origins. The international Arabica benchmark, represented by US Coffee C Futures, declined 2.27% week-on-week (WoW) to USD 7.96 per kilogram (kg). In contrast, Robusta, represented by London Coffee Futures, edged down 0.30% WoW to USD 3.92/kg. Futures markets reflected this softer tone, with Jan-26 Robusta contracts falling nearly 6% over the week and Dec-25 Arabica losing more than 1.6%, driven largely by expectations of abundant supply from Vietnam. Additional pressure came from a late-week selloff, as both New York and London contracts closed lower on December 19 amid production and macro-driven liquidation. Market sentiment was further eased by the agreement between the European Parliament and the Council to postpone the European Union Deforestation Regulation (EUDR), reducing near-term compliance risks and easing speculative tensions.

In origin markets, Brazil showed modest resilience despite global weakness. Brazilian Arabica prices rose 1.18% WoW to USD 7.04/kg, while Robusta increased 0.39% WoW to USD 4.09/kg, reflecting tighter local availability and producer caution. However, the broader outlook remains weighed down by higher supply expectations. The National Supply Company (CONAB) revised its 2025/26 Brazilian production estimate up to 56.5 million bags (+4.3% YoY), reinforcing bearish sentiment, despite contrasting USDA estimates that point to a smaller crop of 63 million bags and a sharp 13.6% YoY decline in Arabica output. Vietnam’s Robusta prices fell 3.86% WoW to USD 3.87/kg as the country heads toward its strongest harvest in four years, even as heavy rains disrupted harvesting and raised quality concerns. Improving supply prospects in Vietnam and upward revisions to Brazilian output have dominated price formation, keeping global coffee markets under short-term downward pressure despite ongoing weather volatility in South America.

2. Price Analysis

Climate Stress Lifts Brazilian Arabica While Expanding Robusta Supply Caps Prices

As of W50 2025, Brazil’s coffee market continues to show a clear structural divergence between Arabica and Robusta prices, driven by climate exposure, supply composition, and demand substitution dynamics. Arabica prices increased 17.43% year-on-year (YoY) to USD 7.96/kg and rose 1.43% month-on-month (MoM), reflecting sustained supply-side stress linked to drought, heatwaves, and yield losses in key producing states such as Minas Gerais and São Paulo. These constraints have reduced export availability and reinforced Brazil’s pricing power in the premium segment, even as total export volumes declined sharply. The rise in export revenues despite lower shipment volumes confirms that higher global valuations, rather than physical tightness alone, are underpinning Arabica prices. By contrast, Brazilian Robusta declined 7.79% YoY to USD 4.09/kg and eased 0.62% MoM, reflecting improving supply conditions, rising investment in irrigated production, and the strategic expansion of canephora cultivation as growers adapt to climate change. The growing availability of higher-quality Robusta has eased price pressure, particularly as it increasingly substitutes for Arabica in blends amid cost-conscious roaster demand.

Vietnam’s Robusta prices also moved lower, declining 20.46% YoY and 10.09% MoM to USD 3.87/kg, reinforcing the broader bearish tone in the Robusta complex. This decline reflects expectations of a stronger Vietnamese harvest and improving global availability, even as excessive rainfall disrupted harvesting and raised quality concerns. While initiatives to promote specialty Robusta and deepen access to high-value markets such as South Korea support longer-term demand, they have not been sufficient to offset near-term supply optimism. The combined effect of expanding Brazilian Robusta output and a recovering Vietnamese crop has capped Robusta prices, contrasting sharply with the tighter Arabica balance.

Looking ahead, Arabica prices are likely to remain firm to mildly bullish into early 2026, supported by structurally declining suitable growing areas, persistent weather volatility, and continued demand for premium beans. Downside risk appears limited unless weather conditions improve materially in Brazil. However, Robusta prices are expected to trade with a neutral to slightly bearish bias in the near term, as rising supply from Brazil and Vietnam outweigh incremental demand gains from specialty and blending use. Over the medium term, quality differentiation may lend selective support to premium Robusta, but the overall Robusta market is likely to remain more range-bound than Arabica.

3. Strategic Recommendations

Adopt a Split Arabica–Robusta Strategy as Supply Optimism Pressures Prices but Structural Divergence Persists

Price action suggests that short-term softness in global coffee markets is being driven more by supply expectations than by a material easing of underlying Arabica constraints. With US Coffee C Futures down to USD 7.96/kg in W50 2025 and Robusta futures retreating more sharply, the near-term bias favors tactical positioning rather than aggressive directional exposure. Arabica fundamentals remain structurally firmer, supported by climate stress in Brazil, declining suitable growing areas, and sustained demand for premium beans, while Robusta continues to face headwinds from expanding supply in Vietnam and Brazil.

From a trading perspective, Arabica exposure should be maintained but deployed selectively. The recent futures pullback provides an opportunity to rebuild length gradually, targeting Q1–Q2 2026 delivery windows where weather risk in Minas Gerais and São Paulo is not yet fully priced. Physical buyers and roasters should prioritize securing Brazilian Arabica coverage on a staggered basis rather than delaying purchases, as downside appears limited unless weather conditions improve materially. For participants sourcing processed or branded products, Tridge’s Eye transaction data indicates active flows involving Brazilian suppliers such as Jacobs Douwe Egberts and Café 3 Corações, reinforcing the case for locking in medium-term supply from Brazil before export differentials widen further.

On the Robusta side, strategy should remain defensive and flexible. The combination of rising Brazilian output, a strong Vietnamese harvest outlook, and weaker futures performance points to a neutral-to-bearish near-term price environment. Buyers should avoid extending long-dated commitments and instead rely on short-term or rolling purchases to benefit from continued price pressure. Vietnam remains the most cost-competitive origin, particularly for blends and processed formats, as reflected by ongoing activity from exporters such as Nestlé Vietnam in value-added products like Dolce Gusto Americano. Any weather-related quality disruptions should be treated as tactical buying opportunities rather than a signal of a sustained price reversal.

Operationally, the action plan over the next one to three months should focus on three priorities. First, rebuild controlled Arabica exposure on dips, using futures or indexed physical contracts to protect against renewed weather-driven rallies. Second, maintain Robusta coverage light and short-dated, allowing portfolios to benefit from further downside linked to supply normalization. Third, align procurement with product mix strategy, favoring Brazilian origins for premium and roasted formats and Vietnamese supply for cost-efficient blends and capsules. This approach balances near-term price weakness with the longer-term structural strength of Arabica, while preserving flexibility in a Robusta market that remains dominated by supply-side optimism.