Arabica coffee (KCZ26) and robusta coffee (RMX26) settled higher on Wednesday, with robusta reaching a one-week high. The upward momentum was driven by tight near-term supplies and adverse weather conditions in key producing regions.
Arabica prices found support as ICE inventories dropped to a 27-year low of 218,838 bags on Tuesday. Meanwhile, robusta received a boost from concerns over heavy rains in Vietnam’s Central Highlands—the world’s largest robusta-producing region—which threaten to flood farms and damage the upcoming crop.
Arabica previously dipped to a two-month low on Tuesday after Brazil’s Trade Ministry reported a 44.6% year-over-year surge in August coffee exports to 206,618 MMT, the highest volume in eight months.
Robusta had earlier fallen to a three-month low last Thursday amid indications of ample supplies from Vietnam. Vietnam’s National Statistics Office revealed that the nation’s coffee exports from January to August rose 13.7% year-over-year to 1.33 MMT.
A bearish factor for prices, above-normal rainfall in Brazil could benefit flowering for next year’s harvest. Somar Meteorologia reported that 8.9 mm of rain—127% of the historical average—fell in Minas Gerais, Brazil’s primary arabica-growing region, during the week ending August 30.
Diverging inventory trends further dictate the market’s trajectory: falling ICE arabica stocks remain bullish, while robusta faces bearish pressure as ICE inventories reached a 9.25-month high of 5,004 lots last Wednesday.
Arabica had previously rallied to an eight-month high last month due to sluggish harvest pace in Brazil. Additionally, the market draws support from a devastating 7.4 magnitude earthquake in Colombia—the world’s second-largest arabica producer—which struck the coffee-growing provinces of Caldas and Risaralda, accounting for roughly a quarter of the nation’s output.
Fears of an El Niño weather pattern damaging Brazil’s future crop are adding a bullish premium. According to trader Commercial, this pattern may delay crucial September and October rains during Brazil’s flowering period, jeopardizing the 2026/27 crop. The US Climate Prediction Center indicated that the El Niño pattern emerging in the equatorial Pacific will likely be one of the most severe in over 75 years, potentially bringing floods, droughts, and temperature extremes that could disrupt production across Asia and South America.
Bearish pressure on robusta stems from soaring exports out of Vietnam, the global leader in robusta production. Vietnam’s 2025 coffee exports surged 17.5% year-over-year to 1.58 MMT, and its 2025/26 production is forecasted to rise 6% year-over-year to a four-year high of 1.76 MMT (29.4 million bags).
The USDA’s biannual forecast presents a bearish outlook for coffee prices. On July 22, the agency projected global coffee output for the 2026-27 season to increase by 6.0% (10.8 million bags) to a record 189.7 million bags, primarily driven by favorable growing conditions in Brazil. Global arabica production is expected to rise 12% year-over-year, while robusta production is forecasted to decline by 0.7%. World ending stocks are anticipated to increase by 1.9 million bags to 26.3 million bags. Earlier, on June 3, the USDA’s Foreign Agricultural Service predicted a record 2026/27 Brazilian crop of 71.9 million bags, a 14% year-over-year increase.