Coffee Prices Close Lower, Fueled by Dollar’s Strength

July arabica coffee (KCN26) fell by 5.05 cents, or 1.80%, on Thursday, while July ICE robusta coffee (RMN26) dropped by 73 points, or 2.05%. This decline in coffee prices coincided with a stronger dollar. The dollar index ($DXY) reached a two-week high, which typically dampens most commodity prices, including coffee.

The previous day saw robusta coffee reach a seven-week high and arabica a one-week high, driven by tightening ICE coffee inventories. Specifically, ICE robusta inventories hit a two-year low of 3,642 lots on Wednesday, while ICE arabica coffee inventories dipped to a 2.5-month low of 471,831 bags on Tuesday.

Reduced exports from Brazil are providing support for coffee prices; Cecafe reported on Tuesday that Brazil’s April green coffee exports decreased by 1.3% year-over-year to 2.76 million bags. Furthermore, the persistent closure of the Strait of Hormuz is disrupting global coffee supplies, which is considered bullish for prices. This closure has constrained supplies by escalating global shipping rates, insurance, fertilizer, and fuel expenses, subsequently increasing costs for coffee importers and roasters.

Conversely, surging coffee exports from Vietnam, the world’s largest robusta producer, are exerting downward pressure on robusta prices. The National Statistics Office of Vietnam reported on Saturday that the country’s coffee exports for January-April 2026 increased by 15.8% annually to 810,000 metric tons. Additionally, Vietnam’s 2025 coffee exports soared by 17.5% year-over-year to 1.58 million metric tons, and its 2025/26 coffee production is forecast to rise by 6% year-over-year, reaching a four-year high of 1.76 million metric tons (29.4 million bags).

Anticipation of a larger Brazilian coffee crop is casting a negative shadow over prices. Last Thursday, the Coffee Trading Academy predicted Brazil’s 2026/27 coffee harvest would increase by 12% year-over-year, reaching 71.4 million bags. Earlier, on March 19, Marex Group Plc forecast a record 2026/27 Brazilian coffee crop of 75.9 million bags, exceeding Sucafina’s projection of 75.4 million bags (a 15.5% annual increase). StoneX, on March 12, also revised its Brazil 2026/27 coffee production estimate upwards to a record 75.3 million bags, from its November estimate of 70.7 million bags. Concurrently, StoneX forecasts the 2026 global coffee surplus to significantly expand to 10 million bags, up from 1.8 million bags in 2025, marking the largest surplus in six years.

Adding to bearish sentiment, the International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (October-September) saw a slight decrease of 0.3% year-over-year, totaling 138.658 million bags.

Finally, the USDA’s Foreign Agriculture Service (FAS) bi-annual report from December 18 projects a 2.0% year-over-year increase in world coffee production for 2025/26, reaching a record 178.848 million bags. This includes a 4.7% decrease in arabica production to 95.515 million bags, offset by a 10.9% rise in robusta production to 83.333 million bags. FAS also forecasts Brazil’s 2025/26 coffee production to decline by 3.1% year-over-year to 63 million bags, while Vietnam’s output is expected to increase by 6.2% year-over-year to a four-year high of 30.8 million bags. Furthermore, 2025/26 ending stocks are projected to fall by 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25.


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