Coffee Markets Heat Up: Vietnam Floods Trigger Robusta Rally While US Tariffs Tighten Global Supply

Coffee futures are on a tear today—robusta coffee just hit a 2-week high, jumping +2.37%, while March arabica is up +0.57%. Here’s what’s driving the moves:

Vietnam Weather Bomb Heavy rains are hammering Vietnam’s Dak Lak province, the country’s coffee heartland, delaying harvests and threatening crop damage. This is actually bullish for robusta prices since Vietnam dominates global robusta production. The irony? Vietnam’s 2025/26 robusta output is already expected to surge +6% to 1.76 MMT (29.4M bags)—a 4-year high—but weather chaos is creating near-term supply uncertainty.

The Tariff Squeeze Trump’s 40% tariff on Brazilian coffee is reshaping the market hard. US imports of Brazilian beans dropped 52% (Aug-Oct 2025 vs. last year), plummeting to just 983,970 bags. Since Brazil supplies roughly 1/3 of America’s unroasted coffee, this is creating real scarcity. Evidence: ICE arabica inventories just hit a 1.75-year low of 396,513 bags, while robusta stocks fell to a 4-month low of 5,640 lots.

Supply Picture Gets Messy Brazil’s 2026/27 production is forecast at 70.7M bags (+29% y/y), including 47.2M arabica—looks bullish on paper. But here’s the kicker: global coffee exports fell 0.3% y/y in the current marketing year, while world production is only expected to grow +2.5% to 178.68M bags in 2025/26. Vietnam’s coffee exports jumped +13.4% y/y to 1.31 MMT (Jan-Oct 2025), but that’s not enough to offset the Brazil tariff disruption.

The Bottom Line Coffee’s stuck between conflicting forces: structural oversupply from Brazil and Vietnam vs. near-term supply tightness from tariffs and weather. Dollar weakness is also helping arabica on the margin. Watch Brazil’s Minas Gerais region—it just got 42% of normal rainfall, which could crimp dry-season crop development. This volatility game isn’t done yet.