Coffee Prices Surge Amid Global Tensions
Today’s trading shows a notable increase in coffee prices, with May Arabica Coffee (KCK26) rising by 12.50 to 4.33% and May ICE Robusta Coffee (RMK26) climbing 100 points, or 2.89%. This uptick comes as Robusta prices reach a 3.5-week peak, influenced by concerns that ongoing conflicts between the U.S. and Iran might jeopardize access to the Strait of Hormuz, a vital shipping route. Such worries have pushed up various costs related to shipping, insurance, and fuel, which in turn tightens supply for coffee importers and roasters.
Robusta coffee prices are bolstered by dwindling supplies, with ICE’s inventory dropping to a 16-month low of 3,755 lots as reported on Tuesday.
In Brazil, where small-scale exports remain a key player, there’s been a noticeable decrease in green coffee exports. Cecafe noted a 10% decline year-on-year in March, reporting 2.65 million bags exported. Furthermore, Brazil’s Ministry of Trade stated coffee exports for March fell by 31% compared to the previous year, totaling 151,000 tons.
Compounding these supply concerns, low rainfall in Brazil could further hinder coffee yields. Recently, Somar Meteorologia highlighted that Minas Gerais, the main Arabica-growing region, received only 4.2 mm of rain last week—just 20% of the typical average.
Unexpectedly, Arabica coffee prices dipped to a seven-week low on the prospect of an unprecedented coffee harvest in Brazil. Marex Group Plc recently projected a record 75.9 million bags for the 2026/27 harvest, surpassing Scafina’s slightly lower estimate of 75.4 million bags (up 15.5% from last year). StoneX also revised its forecast upwards, predicting 75.3 million bags for the same period. They anticipate a significant increase in global coffee surplus, projecting 10 million bags by 2026, a notable rise from 1.8 million bags in 2025.
While the Robusta market shows some bearish signs, largely due to Vietnam’s rising coffee exports—the volume surged 14% from January to March 2026 to about 585,000 tons—the landscape is shifting. Vietnam’s coffee output is expected to increase to 1.76 million tons (around 29.4 million bags) for 2025/26, which would be the highest output in four years.
On the downside, the International Coffee Organization (ICO) indicated a slight decline in global coffee exports for the current marketing year, with a drop of 0.3% from the year before, totaling 138,658,000 bags.
According to the USDA’s Foreign Agricultural Service (FAS), the forecast for global coffee production in 2025/26 anticipates a 2% rise to 178,848,000 bags, setting a new record. However, Arabica production is projected to decrease by 4.7%, bringing it down to approximately 95.5 million bags, while Robusta is expected to increase by 10.9% to 83.3 million bags. Looking at Brazil specifically, FAS forecasts a 3.1% decline in coffee production to 63 million bags, whereas Vietnam’s output may rise by 6.2% to 30.8 million bags in the same period, again marking its highest level in four years. Ending stocks are predicted to decrease by 5.4%, dropping to 20.148 million bags from the prior year’s 21.307 million bags.
