Coffee Market Update

On Friday, coffee markets showed a mixed response. Arabica Coffee for July (KCN26) ended down by 1.05 points, or 0.38%, while ICE Robusta Coffee for July (RMN26) closed up by 57 points, representing a 1.68% increase.

Overall, coffee prices remained steady, but there were notable movements. Robusta prices have surged in Vietnam due to adverse dry conditions, raising concerns over the coffee yield there. According to forecasts from Vaisala, recent rains in Vietnam’s central highlands, the primary coffee-growing area, have been inconsistent, with more precipitation needed for healthy cherry growth.

Additionally, apprehensions about El Niño affecting Brazil’s coffee production next year are keeping prices supported. The Coffee Trader mentions that El Niño patterns might delay rainfall in Brazil during September and October, coinciding with the expected flowering period, which could negatively impact the 2026/27 coffee crop. The National Oceanic and Atmospheric Administration (NOAA) has noted an 82% chance of El Niño conditions occurring from May to July, with a 67% probability of a more intense “Super El Niño”.

Over the past month, coffee prices have decreased as global supply has improved, with Arabica futures hitting a low not seen in a year and a half on Tuesday. The Coffee Trading Academy predicted Brazil’s coffee harvest for 2026/27 could reach 71.4 million bags, an increase of 12% from the previous year. Earlier predictions from Marex Group suggested a record 75.9 million bags, while StoneX raised its forecast to 75.3 million bags from a prior estimate of 70.7 million bags. Furthermore, StoneX anticipates that the global coffee surplus in 2026 may grow to 10 million bags, up from 1.8 million in 2025—the largest surplus in six years.

Robusta prices have been under pressure as Vietnam, the top robusta producer, sees a rapid rise in coffee exports. From January to April 2026, Vietnam’s export volume climbed by 15.8% compared to the previous year, reaching 810,000 tons. In 2025, exports stood at 1.58 million metric tons, marking a 17.5% increase. For 2025/26, production is expected to rise by 6% to 1.76 million metric tons, the highest output in four years.

ICE coffee inventories have been trending downward lately, which has helped bolster coffee prices. Last Friday, ICE Robusta stocks dipped to a two-year low of 3,631 lots, but bounced back to a six-week high of 3,968 lots. On the same day, ICE Arabica inventories fell to 449,567 bags, also the lowest in three months.

Brazil’s smaller-scale exports have also contributed to price support. Last Tuesday, Cecafe noted that Brazil’s green coffee exports in April dipped by 1.3% year-on-year to 2.76 million bags.

Challenges arise from ongoing disruptions in the Strait of Hormuz, which have affected global coffee supply chains, driving prices higher. This closure has led to increased global shipping rates and costs for importers and roasters alike, tightening coffee availability.

On a less optimistic note, the International Coffee Organization (ICO) reported on November 7 that global coffee exports in the current marketing year decreased by 0.3% year-on-year to 138,658,000 bags.

The USDA’s Foreign Agricultural Service (FAS) semi-annual report indicates that global coffee production for 2025/26 is projected to rise by 2.0% to 178,848,000 bags. Notably, Arabica production is expected to fall by 4.7% to 95,515,000 bags, while Robusta is anticipated to increase by 10.9% to 83,333,000 bags. FAS also forecasts Brazil’s coffee production for 2025/26 to drop by 3.1% to 63 million bags, contrasting with a 6.2% increase in Vietnam to 30.8 million bags, marking a four-year peak. Ending stocks are projected to decline by 5.4% to 20.148 million bags from 21.307 million bags in 2024/25.