Coffee futures show mixed trends: rainfall in Vietnam boosts Robusta beans.

Robusta coffee (RMF26) jumped to a two-week high today, rising by 2.37%, while Arabica coffee (KCH26) only increased by 0.57%. Behind the market divergence are two major factors: the weakening dollar triggering hedging positions to be covered, and heavy rains in Dak Lak province, Vietnam's largest coffee-producing area, causing harvesting delays.

Vietnam Weather Risks VS Brazil Production Increase Expectations

According to data from the Vietnam National Bureau of Statistics in November, coffee exports from January to October increased by 13.4% year-on-year to 1.31 million tons, and production for the 2025/26 season is expected to rise by 6% to 1.76 million tons (29.4 million bags), reaching a four-year high. However, Vicofa warns that if weather conditions are unfavorable, production cuts could be as high as 10%.

In contrast, Brazil's StoneX predicts that the production for the 2026/27 season will surge by 29% to 70.7 million bags, with Arabica beans reaching 47.2 million bags. This expected increase in production puts pressure on Arabica beans.

Dual Impact of Inventory and Tariffs

ICE Arabica coffee inventories fell to a 1.75-year low of 396,500 bags, while Robusta coffee stocks also declined to a 4-month low of 5,640 lots - this is a direct consequence of the 40% tariff imposed by the U.S. on Brazilian coffee. Data shows that U.S. imports of Brazilian coffee from August to October plummeted 52% year-on-year to 984,000 bags.

The global supply pattern is tightening

The International Coffee Organization reported in November that global coffee exports for this year fell slightly by 0.3% month-on-month to 139 million bags, signaling a tight supply. The U.S. Department of Agriculture predicts that global production will increase by 2.5% to a historical high of 177 million bags in the 2025/26 season, but inventories will only increase by 4.9%—the production growth rate is outpaced by the consumption growth rate.

Key Points: Tariff impacts + increased production in Vietnam create a hedging effect, but global inventory pressure and uncertainty in Brazilian weather remain price support.