Arabica Coffee Supported by a Slump in ICE Inventories

December 2026 arabica coffee (KCZ26) closed yesterday up 5.60 percent, while November ICE certified robusta (RMX26) slipped 20 percent.

Prices show mixed movement as markets consolidate beyond yesterday’s lows. Strong supply constraints bolster arabica, following a 27‑year trough in ICE arabica stocks that fell to 224,011 bags on Thursday. Robusta faces downward pressure after its inventories surged to a nine‑month high on Tuesday.

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On Thursday, arabica reached a three‑week low while robusta hit a two‑month low amid reports that Brazil’s coffee harvest is nearing completion. Warehouses across the country are straining, prompting growers to hold back shipments in anticipation of stronger prices as storage capacity disappears.

Meanwhile, Brazil’s harvest has progressed well—87.5 percent arabica was ready by Aug 21, a six‑point gain from last week, yet still trailing the year‑ago peak of 91.3 percent. The nation’s 2026/27 crop now stands at 90 percent complete on Wed, lagging 97 percent last year and the five‑year average of 94 percent.

Record‑low inventory levels lift arabica prices, with ICE arabica down to a 27‑year low of 224,011 bags. Conversely, rising ICE robusta stocks hit a nine‑month high of 4,943 lots.

Additional support comes from seismic activity in Colombia, where the August 7.4‑magnitude quake struck key producing regions of Caldas and Risaralda—about one quarter of the country’s output.

Brazilian ports have partially revived exports through the Buenaventura gateway, though flow remains erratic. The earthquake caused little damage to processing or milling infrastructure, per industry insiders.

Weather concerns loom as an intensifying El Niño pattern threatens bountiful rains in Brazil during the critical September–October flowering window, jeopardizing the 2026/27 crop. The U.S. Climate Prediction Center flagged a powerful El Niño event—a strong occurrence in over seven decades—that could bring flooding or drought risk to Latin America throughout the year.

In Minas Gerais—the nation’s principal arabica producer—only 0.6 mm of rain fell last week, roughly 11 percent of the historical average, according to local meteorologists.

Global output growth signals weakness in robusta prices. Vietnam, the leading robusta supplier, increased exports by over twenty‑one percent year‑over‑year to 1.31 million metric tons a decade ago, projecting another six‑percent rise to a four‑year high of 1.76 million bags.

USDA outlooks corroborate these trends: global coffee output is forecast to expand six percent to roughly 190 million bags for the 2026/27 season, driven largely by better conditions in Brazil. Arabica acreage is expected up twelve percent, while robusta yields dip six percent. World stockpiles are set to grow one point nine million bags to 26.3 million total.

On the date of publication,

Rich Asplund

did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.

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