Coffee prices are still dealing with that same tug-of-war between weather troubles in some spots and bigger harvests in others, keeping things unpredictable heading into the new year. The market remains mixed day to day, with arabica contracts showing some weakness after short-lived bounces, while robusta holds up a bit better. Traders are watching technical signals closely, but the real drivers come from what's happening on the ground in the major growing countries.
The flooding in Indonesia continues to be a major headache for the supply side. That country, the third-biggest robusta producer on the planet, has seen serious water damage across key areas. The chairman of the Association of Indonesian Coffee Exporters and Industry pointed out that exports could drop as much as 15% for the 2025-26 season because of it. Roughly a third of the arabica farms in northern Sumatra got hit hard in recent weeks, though robusta fields came through with less damage. These kinds of disruptions don't fix themselves overnight, and they tend to ripple through the market for months, pushing prices up when buyers scramble for alternatives.
In Brazil, the top coffee nation overall, rainfall has stayed below average in the prime arabica region. Somar Meteorologia noted that Minas Gerais only picked up 38.3 mm of rain in the week ending December 19, which was 76% of the usual amount. Dry spells like this can hurt the developing crop, potentially leading to lower yields later on and giving prices some support. That said, Conab, Brazil's official crop agency, adjusted their 2025 forecast upward on December 4 to 56.54 million bags—a 2.4% increase from the September estimate of 55.20 million bags. Forecasts can change with the weather, but for now, it's a reminder that Brazil's output still plays a huge role in keeping global supplies in balance.
Vietnam keeps churning out more robusta, which acts as a counterweight to the bullish news elsewhere. Their statistics office reported on December 5 that November exports surged 39% year-over-year to 88,000 metric tons, and the January-through-November total climbed 14.8% to 1.398 million metric tons. Looking to 2025/26, production is slated to grow 6% to 1.76 million metric tons, or 29.4 million bags—a four-year high. Back on October 24, the Vietnam Coffee and Cocoa Association mentioned output could rise 10% if conditions stay good. As the world's leading robusta supplier, Vietnam's steady increases help cap how high prices can run.
Warehouse stocks tracked by ICE provide another layer of insight, often signaling when supplies are getting tight. Arabica inventories hit a 1.75-year low of 398,645 bags on November 20 before rebounding to a two-month high of 456,477 bags by mid-week. Robusta stocks dipped to an 11.5-month low of 4,012 lots on December 10, then edged up to a three-week high of 4,278 lots shortly after. Lower stocks generally mean roasters and traders might have to bid higher to secure beans.
Past trade issues still echo in the U.S. market too. When tariffs on Brazilian imports were higher under President Trump's earlier policies, American buyers slashed purchases—dropping 52% from August to October compared to the prior year, down to 983,970 bags. Even though those tariffs have eased, domestic inventories remain snug, which could keep upward pressure on retail prices for a while.
Globally, the International Coffee Organization reported on November 7 that exports for the current October-to-September year were down 0.3% year-over-year at 138.658 million bags—a small decline that hints at tightening. The USDA's Foreign Agriculture Service laid out their latest outlook, projecting world production for 2025/26 up 2.0% to a record 178.848 million bags. The split shows arabica falling 4.7% to 95.515 million bags while robusta jumps 10.9% to 83.333 million bags. Brazil's output is seen dipping 3.1% to 63 million bags, contrasted by Vietnam's 6.2% rise to 30.8 million bags, another four-year peak. Ending stocks are forecasted to shrink 5.4% to 20.148 million bags from 21.307 million the previous year.
This ongoing story—floods lingering in Indonesia, dry weather nagging Brazil, and Vietnam flooding the market with robusta—means coffee prices aren't settling down anytime soon. The balance feels fragile, and small shifts in weather or trade can move the needle. For anyone who starts the day with a strong cup or enjoys one to unwind, staying aware of these developments might help make sense of any sticker shock at the store or explain why that favorite blend costs a little more these days. As 2025 rolls on, the coffee market looks set to keep delivering headlines worth watching.
