Recent price moves in coffee were driven by Brazil's dry weather and swings in the U.S. dollar. Arabica futures climbed toward $3.80/lb while robusta showed strength on supply caution in Vietnam; low certified stocks and changing export flows are the principal near-term drivers for traders and commodity investors.

Severe floods in northern Sumatra threaten a large share of Indonesia’s Arabica crop while dry conditions persist in Brazil’s Minas Gerais. Together these weather shocks tighten physical supply for Arabica, supporting bullish price pressure—though recent U.S. dollar strength exposed the market’s vulnerability to macro moves and triggered short-term liquidation in futures.

Recent January 2026 developments—Araku farmers in India receiving EUDR certification and U.S. chain Compass Coffee filing Chapter 11—are shifting supply quality and exposing downstream margin stress. These concrete events influence premiuming, sourcing strategies, and near-term pricing dynamics for Arabica and specialty coffee.

A rapid price rebound in Arabica this week was driven by a stronger Brazilian real that encouraged short-covering and flooding in Indonesia that threatens a sizable cut to exports. Meanwhile, India’s new compliance demands under the EU Deforestation Regulation and government-backed market-intelligence initiatives add near-term costs for smallholders but create pathways to higher‑value EU sales. These developments raise short-term upside for Arabica, shift trade flows, and create tactical opportunities for traders and investors.

Recent heat stress in Brazil and severe floods in Indonesia have tightened Arabica and Robusta supplies, lifting futures and keeping inventories at multi‑year lows. Currency moves and a modest upward revision in Brazil’s crop add nuance, but weather-driven disruption remains the dominant price driver.

Recent concrete events are reshaping coffee pricing: an Indonesia–US trade deal moving toward tariff exemptions on coffee, Brazil's raised production estimate and a stronger harvest pace in Vietnam have pushed futures lower, while U.S. retail prices remain elevated after a tariff rollback. Policy moves in India and currency shifts add shorter-term risk and opportunity for traders and roasters.