Author: Qahwa World |
Date: June 11, 2026
Japan Meteorological Agency Confirms El Niño, Lifting Coffee Prices
Key Takeaways:
- July arabica closed up 1.64% and July robusta up 1.85% after Japan confirmed El Niño formation.
- El Niño could bring months of floods, droughts, and temperature swings, threatening coffee production in Asia and South America.
- Arabica had fallen to a 19-month low on Tuesday amid forecasts of a bumper Brazil crop.
- USDA FAS forecasts a record Brazil 2026/27 crop of 71.9 million bags, up 14% year on year.
- Vietnam’s coffee exports rose 7.9% in January-May 2026, pressuring robusta.
- ICE arabica inventories fell to a 6.5-month low of 402,709 bags on Wednesday.
- NOAA estimates a 67% chance of a “Super El Niño” that could be the strongest on record.
Coffee prices settled sharply higher on Wednesday as short covering emerged after the Japan Meteorological Agency confirmed an El Niño weather pattern had formed across the equatorial Pacific. This sets the stage for months of floods, droughts, and temperature fluctuations later this year that could hinder coffee production in Asia and South America.
July arabica coffee closed up 1.64%, and July robusta closed up 1.85%. The rally followed Tuesday’s declines, when arabica fell to a 19-month low and robusta slid to a two-month low amid expectations of a bumper Brazilian crop this year.
Record Brazil Crop Forecast Still Weighs on Prices
Last Wednesday, the USDA Foreign Agricultural Service (FAS) forecast a record 2026/27 Brazil coffee crop of 71.9 million bags, up 14% year on year. Rabobank also raised its 2026/27 global arabica surplus estimate to 9.5 million bags from 7.0 million bags previously.
On May 7, the Coffee Trading Academy projected Brazil’s 2026/27 harvest would increase by 12% to 71.4 million bags. On March 19, Marex Group projected a record 75.9 million bags, surpassing Sucafina’s 75.4 million bag forecast. StoneX raised its estimate to 75.3 million bags on March 12. StoneX projects the 2026 global coffee surplus will expand to 10 million bags, up from 1.8 million bags in 2025 – the largest surplus in six years.
| Source | Brazil 2026/27 Crop Forecast (million bags) |
|---|---|
| USDA FAS | 71.9 |
| Coffee Trading Academy | 71.4 |
| Marex Group | 75.9 |
| Sucafina | 75.4 |
| StoneX | 75.3 |
Strong Vietnam Exports Pressure Robusta; Inventories Fall
Last Tuesday, Vietnam’s National Statistics Office reported that the country’s coffee exports from January to May 2026 rose 7.9% year on year to 922,000 metric tons. Vietnam’s 2025 coffee exports jumped 17.5% to 1.58 million metric tons. Vietnam’s 2025/26 coffee production is projected to climb 6% to a four-year high of 1.76 million metric tons (29.4 million bags).
In contrast, ICE arabica coffee inventories fell to a 6.5-month low of 402,709 bags on Wednesday. ICE robusta inventories fell to a two-year low of 3,631 lots on May 15 and are now slightly higher at 3,713 lots. The decline in inventories provides some support to prices.
El Niño Confirmation Raises Concerns; Strait of Hormuz Disruptions Persist
The Japan Meteorological Agency confirmed that an El Niño weather pattern has formed across the equatorial Pacific. This could bring months of floods, droughts, and temperature swings that may hinder coffee production in Asia and South America. Coffee trader Commercial stated that El Niño may delay rains in Brazil during September and October, when tree flowering normally occurs, hurting the 2026/27 crop.
The US National Oceanic and Atmospheric Administration (NOAA) estimates a 67% probability of a “Super El Niño” this year, which could be the strongest on record.
Furthermore, the ongoing closure of the Strait of Hormuz continues to disrupt global coffee supplies and is bullish for prices. The closure has tightened supplies by raising shipping rates, insurance, fertilizer, and fuel costs, increasing costs for importers and roasters.
Mixed Outlook for Global Production and Stocks
The International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (October to September) fell 0.3% to 138.658 million bags. The USDA FAS bi-annual report on December 18 projected that 2025/26 world coffee production will increase 2.0% to a record 178.848 million bags. Arabica production is expected to fall 4.7% to 95.515 million bags, while robusta production rises 10.9% to 83.333 million bags.
The USDA FAS also forecasts that 2025/26 ending stocks will fall 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25. This decline reflects strong global demand and persistent supply chain pressures.
| Type | 2025/26 Forecast (million bags) | Year-on-Year Change |
|---|---|---|
| Arabica | 95.52 | -4.7% |
| Robusta | 83.33 | +10.9% |
| Global Total | 178.85 | +2.0% |
Frequently Asked Questions About El Niño and Coffee Prices
Q: Why did coffee prices rise after the El Niño confirmation?
A: Because El Niño can cause floods and droughts that hinder coffee production in Asia and South America, reducing supply and lifting prices.
Q: What is the probability of a “Super El Niño” this year?
A: NOAA estimates a 67% chance of a Super El Niño, which could be the strongest on record.
Q: How do Vietnam’s exports affect robusta prices?
A: Higher Vietnamese exports increase global robusta supply, putting downward pressure on prices.
Q: What is the current level of ICE arabica inventories?
A: They fell to a 6.5-month low of 402,709 bags on Wednesday.
Q: What is the global coffee surplus forecast for 2026?
A: StoneX expects a surplus of 10 million bags, the largest in six years, but El Niño could alter this outlook.
The coffee market remains caught between large surplus expectations on one hand and climate risks from El Niño plus geopolitical tensions in the Strait of Hormuz on the other. Confirmation of El Niño adds a new layer of uncertainty and could reshape market balances in the coming months.
Prepared and edited by: Qahwa World – Based on a Barchart report by Rich Asplund (adapted).
All rights reserved. Republication with attribution permitted.
Publication date: June 11, 2026
