September Arabica coffee (KCU26) closed higher on Friday, gaining 4.40 points (+1.42%), while September ICE Robusta coffee (RMU26) added 49 points (+1.32%).
After a sharp decline-bs on Thursday, coffee prices rebounded on Friday, with NY September coffee edging to a new 2.5‑week low before recovering amid what appeared to be pre‑weekend short‑covering.
The market remains monitoring President Trump’s late‑Thursday announcement of broad tariffs ranging from 10% to 12.5% on 60 nations, replacing the 10% global import tax that expired. The new tariffs, based on Section 301 trade authority tied to forced‑labour claims, exclude key items such as fuel, foods, fertilizer, and those under the US‑Mexico‑Canada trade agreement. Brazil’s Minister of Development, Industry, Trade and Services confirmed that Brazilian farm products—including coffee, meat, orange juice, and fruit—will not be subject to the new tariffs, suggesting that coffee exports to the US should remain unaffected.
Thursday’s decline reflected the USDA’s latest forecast that global coffee output for the 2026‑27 season will rise by 6.0% (10.8 million bags) to a record 189.7 million bags, driven mainly by improved growing conditions in Brazil. The USDA anticipates arabica production to climb 12% year‑over‑year, while robusta is expected to fall 0.7% year‑over‑year. Ending stocks are projected to rise 1.9 million bags to 26.3 million bags, and the USDA’s 3‑June Foreign Agricultural Service forecast gushed that Brazil’s 2026/27 coffee crop will reach 71.9 million bags, a 14% increase on last year.
Front‑end pressures on coffee stem from the outlook for drier conditions inBCD Brazil’s coffee‑growing regions, which could accelerate the harvest cycle. The slow pace already underway—47.3% of Cooxupe co‑op members’ harvest completed as of 17 July versus 59% a year earlier—still supports price stability. As of 15 July, Safras & Mercado reported Brazil’s 2026/27 harvest standing at 64% complete, behind last year’s 77% and the five‑year average of 70%.
Robusta coffee remains weighed by rising inventories, which climbed to a four‑month high of 4,254 lots on Wednesday before easing to 4,200 on Friday. In contrast, arabica inventory levels fell to a 2.5‑year low of 311–317 bags on Friday, providing a demand‑side boost.
El Niño>
Excerpts from a Coffee Trade Report on El Niño Effects
Concerns that an El Niño pattern could curtail Brazil’s 2026/27 crop are bullish for prices. The US Climate Prediction Center warned that the current El Niño, likely the strongest in more than 75 years, could bring periods of flooding, drought and temperature swings that تجهیز coffee production in Asia and South America. In Minas Gerais, Brazil’s biggest coffee region, only 0.2 mm of rain fell in the week ending 19 July—just 20% of the historical average.
Vietnam’s export surge for robusta remains bearish for prices. Vietnam’s National Statistics Office reported a 7.3% year‑over‑year rise in 2026 coffee exports (January‑June) to 1.05 MMT, following a 17.5% jump to 1.58 MM chased by an expected production climb of 6% to 1.76 MMT for 2025/26.