Brazil’s hitting a dry spell and coffee traders are freaking out—literally. March arabica futures jumped +7.40% today after weather data showed Minas Gerais (Brazil’s biggest arabica zone) got only 26.4mm rain last week, a 49% shortfall from normal.
Here’s the plot twist: Trump just exempted Brazilian coffee from tariffs yesterday, which should’ve crushed prices, but nope—supply concerns are winning.
The real story:
ICE arabica inventories hit a 1.75-year low (398,645 bags)
US importers ditched Brazilian coffee contracts due to tariffs; imports dropped 52% Aug-Oct vs last year
Vietnam’s coffee output climbing though—up 13.4% YoY exports, production forecast +6% to 1.76 MMT
Long-term wild card: StoneX says Brazil’s 2026/27 crop will surge +29% YoY to 47.2 million bags. That’s a LOT of supply coming. Global coffee production also trending up—USDA pegging 2025/26 at record 178.68 million bags.
So tldr: Brazil’s dry = short-term support for prices rn. But Vietnam ramping + Brazil’s monster crop coming = trouble ahead for bulls. Classic commodity squeeze play.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
Coffee Market Shakeup: Brazil's Drought Sends Arabica Prices Flying
Brazil’s hitting a dry spell and coffee traders are freaking out—literally. March arabica futures jumped +7.40% today after weather data showed Minas Gerais (Brazil’s biggest arabica zone) got only 26.4mm rain last week, a 49% shortfall from normal.
Here’s the plot twist: Trump just exempted Brazilian coffee from tariffs yesterday, which should’ve crushed prices, but nope—supply concerns are winning.
The real story:
Long-term wild card: StoneX says Brazil’s 2026/27 crop will surge +29% YoY to 47.2 million bags. That’s a LOT of supply coming. Global coffee production also trending up—USDA pegging 2025/26 at record 178.68 million bags.
So tldr: Brazil’s dry = short-term support for prices rn. But Vietnam ramping + Brazil’s monster crop coming = trouble ahead for bulls. Classic commodity squeeze play.