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Coffee Prices Drop Amid Rising Inventories and Supply Concerns

by Jessica

Coffee prices are under pressure today, with March arabica coffee (KCH25) down by 4.52%, falling by -18.90 points, and March ICE robusta coffee (RMH25) down by 1.49%, dropping -86 points.

Arabica coffee has dropped sharply to a two-week low, with a notable rebound in inventories fueling long liquidation pressures in arabica coffee futures. According to Wednesday’s data, ICE-monitored arabica inventories increased by 2.1% to 774,553 bags, recovering from Tuesday’s 9-month low of 758,514 bags. On the other hand, ICE-monitored robusta coffee inventories hit a 4-3/4 month high on January 31, reaching 4,603 lots, but fell to a 1-3/4 month low of 4,297 lots by Tuesday. Today, robusta inventories are at 4,347 lots.

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In a bullish sign for coffee prices, an increased portion of Brazil’s 2024/25 coffee harvest has already been sold, reducing the amount of supply available for sale. As of February 11, 88% of Brazil’s coffee harvest has been sold, according to Safras & Mercado, which is ahead of last year’s pace of 79% and the 5-year average of 82%. In contrast, sales for the 2025/26 crop have been slow, at only 13%, significantly below the 4-year average of 22%. This suggests that producers are holding off on selling new supplies.

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Continued concerns over coffee supply have helped sustain prices. Last Wednesday, Cecafe reported that Brazil’s green coffee exports in January fell by 1.6% year-over-year to 3.98 million bags. Furthermore, Brazil’s government crop forecasting agency, Conab, projected a 4.4% year-over-year decline in Brazil’s 2025/26 coffee crop to a 3-year low of 51.81 million bags. Conab also revised down its 2024 crop estimate by 1.1%, lowering it to 54.2 million bags from its September estimate of 54.8 million bags.

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