July arabica coffee (KCN26) today is up +5.30 (+2.06%), and July ICE robusta coffee (RMN26) is up +18 (+0.50%).
Coffee prices continued their upward rally, reaching a two‑week peak for arabica and a five‑week peak for robusta. The market is buoyed by worries that ongoing rain in Brazil may postpone the harvest. Forecaster Vaisala predicts moderate to heavy rain across Brazil’s coffee‑producing areas this week.
ICE coffee inventories have been declining over the last three months, reinforcing price support. Arabica stocks dropped to a 6.75‑month low of 398,940 bags last Friday, while robusta stocks fell to a two‑year low of 3,631 lots on May 15 and presently sit at 3,857 lots.
Concerns that an El Niño event could impair Brazil’s coffee harvest next year are bolstering prices. Trader Commercial notes that El Niño may delay September‑October rains, timing critical for tree flowering, potentially affecting the 2026/27 Brazilian crop.
The US National Oceanic and Atmospheric Administration (NOAA) puts the chance of a “Super El Niño” this year at 67%, potentially the most intense on record. The Japan Meteorological Agency recently confirmed an El Niño pattern across the equatorial Pacific, raising the likelihood of floods, droughts, and temperature swings later this year that could disrupt coffee production in Asia and South America.
Last Tuesday, arabica slipped to its lowest nearest‑futures level in 19 months and robusta to a two‑month low, amid expectations of a bumper Brazilian harvest this year. On June 3, the USDA’s Foreign Agricultural Service (FAS) projected a record 2026/27 Brazilian crop of 71.9 million bags, a 14% increase year‑over‑year. Rabobank also lifted its 2026/27 global arabica surplus forecast to 9.5 million bags from 7.0 million. Additionally, Cecafe reported on Thursday that Brazil’s May green‑coffee exports rose 4.2% year‑over‑year to 2.73 million bags.
Rapidly rising Vietnamese coffee exports, the world’s largest robusta producer, are putting downward pressure on robusta prices. Vietnam’s National Statistics Office indicated that exports from January to May 2026 increased 7.9% year‑over‑year to 922,000 metric tonnes. Full‑year 2025 exports rose 17.5% year‑over‑year to 1.58 million metric tonnes. Moreover, Vietnam’s 2025/26 production is forecast to grow 6% year‑over‑year to a four‑year high of 1.76 million metric tonnes (29.4 million bags).
The ongoing closure of the Strait of Hormuz has disrupted global coffee supply chains, exerting upward pressure on prices. By inflating shipping rates, insurance, fertilizer, and fuel costs, the closure raises expenses for importers and roasters.
Conversely, the International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (October‑September) slipped 0.3% year‑over‑year to 138.658 million bags.
The USDA’s Foreign Agricultural Service (FAS) bi‑annual report dated December 18 projects that world coffee production in 2025/26 will rise 2.0% year‑over‑year to a record 178.848 million bags, with arabica down 4.7% to 95.515 million bags and robusta up 10.9% to 83.333 million bags. FAS anticipates a 3.1% year‑over‑year decline in Brazil’s 2025/26 output to 63 million bags, while Vietnam’s 2025/26 production is expected to increase 6.2% to a four‑year high of 30.8 million bags. Global ending stocks are projected to fall 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25.
