The coffee market entered December at a slower pace after the heavy volatility recorded in November. Arabica March/26 traded within a narrow range of 370–380 cts/lb, reflecting reduced short-term pressure but without confirmation of a defined trend. The week ended with a 1.7% decline, influenced mainly by a firmer dollar and a technical adjustment following recent large price swings. Robusta began the month under greater pressure, with consistent declines bringing March/26 back toward USD 4,000/t, driven by improved weather conditions in Southeast Asia.
In New York, the market alternated between recovery and correction without sufficient momentum to break the current price range. Price weakness at the start of the month reflected technical adjustments and a stronger dollar, followed by renewed volatility linked to U.S. tariff developments and recent USDA announcements. Isolated gains were supported by forecasts of drier weather in Brazil, but arabica ultimately closed the week lower.
In London, losses in robusta were more pronounced. A gradual improvement in weather conditions in Vietnam reduced harvest concerns and helped build expectations of more comfortable supply across Southeast Asia, compounded by the impact of a stronger dollar on Brazilian flows.
Despite the rapid assimilation of the U.S. tariff removal on Brazilian coffee, the market remains attentive to potential effects on export flows at the start of 2026. The latest USDA estimates for 2025/26 did not materially change the broad outlook. Bullish elements included the continued decline in certified stocks, confirmation of crop losses in Brazil for 2025, and the perception of tighter global arabica supply. Offsetting factors came from robusta: improved weather in Vietnam, proximity to USD 4,000/t, and expectations of a more favorable 2026 Brazilian crop if rainfall normalizes.
Certified stocks continued their downward trajectory, reinforcing a structurally tighter arabica environment. However, their influence was muted this week as macroeconomic and climate-driven news dominated short-term price action.
Weather remained central to sentiment. In Brazil, irregular rainfall sustained concerns around the recovery of the 2026 crop. Forecasts of drier conditions supported selective buying in New York but also raised doubts regarding crop development in regions still lacking sufficient moisture. In Vietnam, weather normalization after excessive rains eased concerns and intensified downward pressure on robusta in London. In Colombia, short-term conditions have improved, but the USDA highlights signs of field exhaustion after an exceptional crop.
Macro factors also played a relevant role. Dollar appreciation increased Brazilian competitiveness and weighed on international prices, particularly late in the week. On the regulatory front, the removal of U.S. tariffs and the postponement of the EUDR by the European Parliament reduced some of the uncertainty that affected November.
USDA’s 2025/26 update reinforced a view of moderate stability in global supply, although with notable shifts among key origins. Brazil is estimated at 63 million bags, a 3% year-on-year decline, with arabica down 13% and robusta up 19%. Lower supply and diminished stocks may impact export flows. Colombia is forecast at 13.8 million bags, down 7%; while weather is currently favorable, field renewal and recent strain limit production capacity. Vietnam is expected to reach 30.8 million bags, almost entirely robusta, but excessive rainfall has hindered part of the crop. Indonesia could reach 12.5 million bags, supported by productivity gains and greater input usage.
The market remains without a clear direction. Current arabica price levels suggest a consolidation phase, with participants monitoring weather developments in Brazil and the capacity for global supply recovery in 2026. Robusta remains sensitive to the progress of the Vietnamese harvest and confirmation of yields in key regions. Attention now turns to Brazilian export behavior in the coming weeks, the real impact of a stronger dollar on physical flows, and rainfall conditions in the coffee belt. In the short term, the trend remains neutral, with price action driven by technical movements while the market awaits more consistent fundamental signals.
Analysis done by Adelso Zamprogno