Coffee Market Dynamics: Brazil's November Export Contraction Reshapes Price Outlook

Brazil’s coffee export performance in November painted a cautious picture for global supply chains. According to exporter group Cecafe, shipments of green coffee from Brazil in November experienced a significant year-over-year contraction of 27%, sliding to 3.3 million bags. This export slowdown provided underlying support for arabica coffee prices, with March arabica contracts closing Thursday at +3.90, up 1.05% on the session. Meanwhile, January ICE robusta coffee settled -15 points, or -0.26%, as the market navigated competing supply narratives.

Supply Pressures Vary Across Coffee Origins

The tightening of Brazilian coffee exports reflects broader climatic challenges affecting the world’s leading arabica producer. Somar Meteorologia’s precipitation data underscores the severity: Minas Gerais, Brazil’s premier arabica-growing region, received just 11 millimeters of rain during the week ending December 5—a mere 17% of its historical average. Such drought conditions typically constrain near-term output and lend support to pricing.

Contrasting Brazil’s supply constraints, Vietnam’s coffee output trajectory presents a different dynamic. Vietnam’s National Statistics Office reported a robust surge in November coffee exports, which jumped 39% year-over-year to 88,000 metric tons. Cumulative exports from January through November climbed 14.8% annually to 1.398 million metric tons. Projections from Vietnam’s coffee and cocoa industry association indicate 2025/26 output could reach 1.76 million metric tons, or approximately 29.4 million bags—potentially the highest in four years. This abundance of robusta supplies has weighed on robusta contracts, which earlier this week touched a 2.25-month low.

Production Revisions and Global Inventory Trends

Brazil’s crop forecasting agency Conab recently adjusted expectations upward, raising its 2025 coffee production estimate by 2.4% to 56.54 million bags from a prior September forecast of 55.20 million bags. At the global level, the USDA Foreign Agriculture Service projects world coffee production in 2025/26 will reach a record 178.68 million bags, representing a 2.5% increase. The projection includes a 1.7% decline in arabica production to 97.022 million bags, offset by a 7.9% surge in robusta production to 81.658 million bags.

ICE-monitored arabica inventories have demonstrated volatility. Stocks declined to a 1.75-year low of 398,645 bags on November 20, though they recovered to 426,523 bags by last Friday—a one-month high. Robusta inventories are tracking tighter, having fallen to an 11.5-month low of 4,012 lots on Wednesday. Despite these inventory pressures, global coffee exports for the current marketing year (October-September) registered a marginal 0.3% year-over-year decline to 138.658 million bags, per the International Coffee Organization’s November 7 report.

Policy and Tariff Dynamics

A significant policy development emerged when the European Parliament on November 26 approved a one-year postponement of the EU Deforestation Regulation (EUDR). This delay permits EU member states to continue importing agricultural commodities, including coffee, from regions experiencing deforestation in Africa, Indonesia, and South America—a development that has eased regulatory pressure on certain supply channels.

On the tariff front, the removal of previous US import duties on Brazilian products has begun reshaping buyer behavior. US purchases of Brazilian coffee from August through October—when Trump-era tariffs were in force—dropped 52% year-over-year to 983,970 bags. Normalization of trade relations could support renewed US demand for Brazilian coffee, though domestic US inventories remain comparatively tight, providing some counterbalance to the tariff relief.