Brazil’s Coffee Harvest Progress and El Niño Impact Coffee Prices

Arabica coffee (KCZ26) declined -0.25 (-0.08%) today, while ICE robusta coffee (RMU26) fell sharply by -86 (-2.32%).

Coffee prices dropped today, with robusta under pressure from rising inventories, which reached an 8.75-month high of 4,732 lots. Arabica faced concerns over Brazil’s harvest pace, with traders noting expectations of drier weather accelerating picking. Robusta inventory growth and Vietnam’s strong export performance further weighed on prices.

Brazil’s Cooxupe co-op reported that 81.1% of the 2026/27 coffee harvest was complete as of Thursday, a 7-point increase from last week but still lagging behind last year’s 86.1% and the five-year average of 94%. Below-normal rainfall in Minas Gerais, Brazil’s key arabica region, was reported at 0.6 mm, just 11% of the historical average for the week ending August 16.

Last Wednesday, arabica prices surged to a six-and-a-half-month high as delays in Brazil’s harvest limited supply. Safras & Mercado data showed the 2026/27 harvest at 90% completion, trailing last year’s 97% and the five-year benchmark of 94%. Brazil’s arabica harvest stood at 81% as of Thursday, compared to 86% in 2025.

Falling inventories support arabica prices, with ICE arabica inventories hitting a 2.75-year low of 229,214 bags on Tuesday. Meanwhile, rising robusta inventories signal bearish trends, as ICE robusta stockpiles reached 4,722 lots today.

Coffee markets also reacted to Monday’s 7.4-magnitude earthquake in Colombia’s Caldas and Risaralda provinces, which produce about a quarter of the country’s arabica. While exports via the Buenaventura port have partially resumed, delays persist. Bloomberg reported that Colombia’s Asoexport confirmed no significant damage to processing facilities, but traffic remains inconsistent.

El Niño concerns resurfaced as a potential bullish factor. Commercial Trading warned that the strong El Niño El Niño—stronger than any in 75 years—could bring erratic weather in Brazil during September and October, disrupting tree flowering for the 2026/27 crop. The US Climate Prediction Center confirmed this on July 8, with El Niño expected to drive extreme weather patterns in the Pacific.

On the bearish side, Vietnam’s robusta export growth continued. Vietnam’s 2026 exports (January 1 – July 1) rose 21.1% year-on-year to 1.31 million metric tons, up from 1.58 million in 2025. The Southeast Asian region’s robusta production is projected to climb 6% year-on-year to 4-year high of 1.76 million metric tons (29.4 million bags).

The USDA’s July 22 report predicted a record 2026-27 global coffee output of 189.7 million bags, with a 6% increase in global supplies. Brazil’s 2026/27 crop forecast rose 14% year-on-year to 71.9 million bags. Arabica production is expected to jump 12% globally, while robusta contracts by 0.7%. World ending stocks are projected to rise by 1.9 million bags to 26.3 million bags by September.

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. For more information please view the Barchart Disclosure Policy here.

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