# Coffee Market Getting Hammered: Here's What's Going On

Coffee futures took a beating this week. March arabica dropped 3.31% while January robusta fell 1.25%—and the culprit? Rain forecasts over Brazil's coffee belt.

Climatempo predicted heavy rainfall hitting Brazil's coffee-growing regions starting this week, which is great news for crops but terrible news for prices. The irony? Prices had actually been climbing recently thanks to US tariffs on Brazilian coffee, but that relief trade just got wiped out.

Here's the bigger picture: The US just slapped a 40% tariff on Brazilian coffee imports (separate from the general 10% reciprocal tariff), and it's already having major effects. American importers are bailing on Brazilian coffee contracts—purchases dropped 52% from Aug-Oct compared to last year. About a third of US coffee supply normally comes from Brazil, so this is actually tightening inventories.

Proof? ICE arabica stocks hit a 1.75-year low at 396,513 bags on Tuesday.

But here's the bearish flip side: Vietnam's killing it in robusta production—up 13.4% year-over-year in exports and projected to hit 31 million bags in 2025/26. Brazil's also ramping up, with forecasts showing a 29% year-on-year jump to 70.7 million bags next season.

So the setup is messy: tight near-term supply fighting oversupply fears down the road, tariffs supporting prices while rain forecasts tank them. Classic commodity whipsaw.