Coffee Market Heats Up: Vietnam Rain Sends Robusta Surging While Brazil Faces Tariff Crunch

Coffee just had a solid day in the pit. Arabica (March) climbed +2.15% to $0.57, but robusta absolutely ran—January robusta (RMF26) pumped +2.37% to a fresh 2-week peak. Here’s what’s moving the needle:

The Vietnam Play

Heavy rains hammering Dak Lak (Vietnam’s coffee heartland) just spooked the market. Harvest delays + forecast for more showers = potential crop damage. Robusta is world-sourced mainly from Vietnam, so weather jitters here hit hard. But plot twist: despite the near-term rain fears, Vietnam’s 2025/26 output is actually projected at 1.76 MMT (29.4M bags)—a +6% y/y jump and 4-year high. The Vietnam Coffee & Cocoa Association even flagged a potential +10% upside if conditions stay favorable.

The Brazil-Tariff Squeeze

This is where it gets spicy. Trump’s 40% tariff on Brazilian coffee is still live and messy. While last week’s announcement dropped reciprocal tariffs (10%) on non-US commodities including coffee, the 40% “national emergency” levy on Brazil remains in play—and the admin hasn’t clarified if importers are exempt yet. Result? US coffee buyers are ghosting Brazilian contracts. August-October purchases of Brazilian beans cratered 52% y/o/y to 984K bags. About 1/3 of America’s unroasted coffee comes from Brazil, so this matters.

The Supply Tightness

ICE arabica inventories just hit 1.75-year lows (396,513 bags on Tuesday). Robusta warehouses dropped to 4-month lows (5,640 lots). The global coffee export data is tightening too—Oct-Sep exports slipped 0.3% y/y to 138.66 million bags per the International Coffee Organization.

Brazil’s Conab dropped its 2025 arabica output forecast by -4.9% to 35.2M bags back in September, though that offset by longer-term production growth coming. The USDA expects world coffee production in 2025/26 to hit a record 178.68M bags (+2.5% y/y), driven by robusta jumping +7.9% while arabica slides -1.7%.

Bottom Line

Short-term: Rain fears in Vietnam + tariff chaos in Brazil = volatile pricing ahead. Medium-term: Global supply climbing but near-term tightness keeps buyers nervous. The $ weakness today also sparked some short covering in arabica, adding to the upside. Watch Vietnam weather forecasts and any Trump admin clarity on that 40% tariff—both could swing prices hard.