Brazil Harvest Delays Drive Coffee Price Surge

July arabica coffee (KCN26) rose +3.25 (+1.28%), while July ICE robusta (RMN26) advanced +131 (+3.78%) on Friday.

Persistent rainfall in Brazil’s coffee-growing areas threatens to delay harvests, tightening supply and boosting prices. Forecaster Vaisala predicts continued moderate to heavy rain this week, potentially extending into next week.

Positive consumer sentiment in the U.S. also supports prices, with the University of Michigan’s June index climbing +4.1 to 48.9. Lower coffee inventories further bolster the outlook, with ICE arabica stocks hitting a 6.75-month low of 398,940 bags and robusta inventories edging up from a 2-year low of 3,631 lots.

Concerns about a “Super El Niño” pattern, which could disrupt Brazil’s 2026/27 crop during flowering, add further price support. NOAA estimates a 67% chance of this severe weather pattern, which may cause global supply chain issues affecting coffee production in South and Central America.

Meanwhile, rising Vietnamese robusta exports—up 7.9% YoY to 922,000 MT in Jan-May 2026—weigh on robusta prices. Vietnam’s 2025/26 production is also projected to hit a 4-year high of 1.76 MMT (29.4 million bags).

While Brazil’s 2026/27 crop is forecast at a record 71.9 million bags (+14% YoY), tighter global shipping due to the Strait of Hormuz closure is increasing costs for coffee importers, counteracting bearish supply forecasts. Inventory depletion and negative sentiment around Southeast Asian production remain key price drivers.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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