Coffee prices tumble experienced a sharp downturn on Tuesday after initially rallying, as market sentiment turned bearish due to growing concerns about global demand. A key trigger was the U.S. consumer confidence index for April, which plummeted to a nearly five-year low. Analysts say this signals economic unease among consumers, potentially reducing discretionary spending—including on non-essential goods like coffee.
Adding to the downward pressure, Brazil’s coffee-growing region of Minas Gerais received an unusually high amount of rainfall—38.7 mm in the week ending April 19, according to Somar Meteorologia. This figure is 490% above the historical average, improving soil moisture but simultaneously weighing on arabica coffee Prices tumble due to expectations of better yields. At the same time, monitored inventories of arabica coffee rose to a 2.5-month high of 826,304 bags, adding to the oversupply narrative.
Mixed Crop Forecasts Create Price Volatility
Despite bearish trends, initial optimism in the coffee market was driven by fears of reduced supply. Arabica prices briefly touched a 2.5-month high, while robusta reached a one-month high. Rabobank’s latest forecast contributed to this optimism, predicting a 13.6% year-over-year drop in Brazil’s 2025/26 arabica output due to prolonged dry weather damaging coffee tree flowering. Conversely, robusta is expected to see a 7.3% increase, reaching a record 24.7 million bags, offsetting some of the supply concerns.
Currency movements also played a role. The Brazilian real strengthened to a 3.5-week high against the U.S. dollar, making Brazilian coffee Prices tumble exports less attractive and momentarily supporting prices. On the supply front, Brazil’s green coffee exports fell 26% year-over-year in March, according to Cecafe. Conab also revised down its 2024 and 2025/26 coffee crop estimates, citing adverse weather conditions and projecting a three-year low in output.
The longer-term impact of El Niño-induced droughts is still unfolding, with both Brazil and Colombia—two major arabica producers—reporting damaged crops. Brazil’s ongoing dry spell is the worst since 1981, while Colombia continues to recover from last year’s weather disruptions.
Global Trade and Production Trends Add Complexity
On the robusta front, Vietnam, the world’s largest robusta producer, is facing significant setbacks. A severe drought has slashed its 2023/24 coffee production by 20% to the smallest in four years. The Vietnam Coffee and Cocoa Association further revised its 2024/25 output estimate downward, and official statistics revealed a 17.1% drop in exports this year. Cumulatively, these trends lend some upward pressure to robusta prices.
Still, broader global trade data has tempered bullish sentiment. Brazil’s coffee exports in 2024 surged by nearly 29% year-over-year to a record 50.5 million bags, according to Conab. However, global coffee Prices tumble in December fell 12.4% year-over-year, suggesting inconsistencies in global supply chains.
The USDA’s biannual report painted a mixed picture: while world coffee production in 2024/25 is forecast to grow by 4% to 174.855 million bags, ending stocks are projected to fall by 6.6% to a 25-year low. Volcafe also issued a stark warning, projecting a global arabica deficit of 8.5 million bags in 2025/26 due to Brazil’s prolonged drought.
In summary, coffee markets remain in flux, driven by a tug-of-war between weakening demand and tightening supply forecasts.
