Tag: Coffee Market News

Coffee Prices Get Support from Brazilian Real Strength

Posted on by Qahwa World
Dubai – Qahwa World

Coffee futures traded sharply higher today. Arabica coffee rose to its highest level in one week. July arabica gained 3.43 percent. July robusta added 1.5 percent.

A major supporting factor is the strength of the Brazilian real. The currency surged to a two and a quarter year high against the US dollar. A stronger real discourages Brazilian coffee farmers from selling their crops overseas, which pushes prices upward.

Additional support comes from the ongoing closure of the Strait of Hormuz. This disruption has raised global shipping rates, insurance costs, fertilizer and fuel expenses. Coffee importers and roasters now face higher costs, tightening global supplies.

On the negative side, expectations of a large Brazilian coffee crop are limiting gains. The Coffee Trading Academy projected last Thursday that Brazil’s 2026/2027 harvest will increase 12 percent year over year to 71.4 million bags.

On March 19, Marex Group Plc forecast a record Brazilian crop of 75.9 million bags for the same season. That surpassed Sucafina’s forecast of 75.4 million bags, which represented a 15.5 percent annual increase. On March 12, StoneX raised its Brazil production estimate to a record 75.3 million bags, up from a November estimate of 70.7 million bags. StoneX also projected the 2026 global coffee surplus would expand to 10 million bags from 1.8 million bags in 2025. That would be the largest surplus in six years.

For robusta coffee, soaring exports from Vietnam are a bearish factor. Vietnam is the world’s largest robusta producer. On Saturday, Vietnam’s National Statistics Office reported that the country’s coffee exports from January to April 2026 rose 15.8 percent year over year to 810,000 metric tons. Vietnam’s 2025 coffee exports jumped 17.5 percent annually to 1.58 million metric tons. In addition, Vietnam’s 2025/2026 coffee production is projected to climb 6 percent year over year to a four year high of 1.76 million metric tons, or 29.4 million bags.

Tightness in arabica supplies is supporting prices. ICE arabica coffee inventories fell to a two and a quarter month low of 494,508 bags on April 21.

Smaller exports from Brazil also help support prices. On April 14, Cecafe reported that Brazil’s March green coffee exports fell 10 percent year over year to 2.65 million bags. On April 7, Brazil’s Trade Ministry reported that March coffee exports fell 31 percent annually to 151,000 metric tons.

Robusta coffee also sees bullish signs from tighter supplies. ICE robusta inventories fell to a sixteen and a quarter month low of 3,755 lots last Tuesday.

As a bearish factor, the International Coffee Organization reported on November 7 that global coffee exports for the current marketing year, which runs October through September, fell 0.3 percent year over year to 138.658 million bags.

The USDA’s Foreign Agriculture Service said in its biannual report on December 18 that world coffee production in 2025/2026 would increase 2.0 percent annually to a record 178.848 million bags. That includes a 4.7 percent decrease in arabica production to 95.515 million bags and a 10.9 percent increase in robusta production to 83.333 million bags. The USDA forecasted that Brazil’s 2025/2026 coffee production would decline 3.1 percent to 63 million bags. Vietnam’s coffee output would rise 6.2 percent to a four year high of 30.8 million bags. The USDA also forecasts that 2025/2026 ending stocks will fall 5.4 percent to 20.148 million bags from 21.307 million bags in 2024/2025.

Oil Surge Could Brew Higher Coffee Prices

Posted on by Qahwa World

Dubai – Qahwa World

Rising oil prices linked to escalating tensions in the Middle East are raising fresh concerns across the coffee sector, with vendors warning that higher fuel costs could eventually translate into more expensive coffee for businesses and consumers.

Crude oil climbed above 90 dollars per barrel on Friday, a level that industry participants say may increase the cost of transporting coffee beans across global supply chains. Because coffee is largely traded internationally and shipped over long distances, higher energy prices can quickly affect freight and logistics costs.

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The concern comes only months after the United States removed most tariffs on coffee and several agricultural products last November, a move that had provided temporary relief to importers, roasters and coffee retailers.

  • Shipping Costs Back in Focus

Coffee businesses say transportation costs remain one of the most sensitive factors affecting the price of beans. Any sustained increase in oil prices could raise the cost of shipping green coffee from producing countries to roasting and consuming markets.

Industry observers note that global coffee prices have already been under pressure due to supply challenges in recent years.

According to the World Bank, coffee prices have remained relatively high after adverse weather conditions in several coffee-producing regions reduced harvests and tightened global supply. Earlier expectations suggested that prices might gradually ease this year as production recovered.

However, the recent geopolitical tensions and the accompanying surge in oil prices could introduce new cost pressures, particularly through higher freight rates and supply chain expenses.

  • Uncertain Outlook for Coffee Markets

For coffee retailers and roasters, the coming months may depend largely on how energy markets evolve. Higher fuel costs can affect nearly every stage of the coffee supply chain, from farm transportation and export logistics to international shipping.

While the full impact remains uncertain, market participants say sustained increases in oil prices could add another layer of volatility to an already sensitive global coffee market.

 

Brazil Crop Expectations Pressure Global Coffee Prices

Posted on by Qahwa World

Dubai – Qahwa World

Coffee futures closed lower at the end of the week as expectations of stronger global production continued to weigh on sentiment. The market reaction reflects growing confidence that supply conditions may improve in the upcoming seasons, particularly with Brazil at the center of the outlook.

A recent projection from Rabobank indicates that global coffee production could reach 180 million bags in the 2026/27 season, potentially marking a record and representing an increase of around 8 million bags compared with the previous year. The forecast has reinforced a broader shift in market expectations after months dominated by tight supply concerns.

In Brazil, fresh estimates from Conab point to a significant rebound in output for 2026. The agency projects total production at 66.2 million bags, up 17.2% year-on-year. Arabica output is expected to rise more sharply, increasing 23.2% to 44.1 million bags, while robusta production is forecast to grow 6.3% to 22.1 million bags.

Weather conditions have contributed to the improved outlook. Data from Somar Meteorologia show that Minas Gerais, Brazil’s largest arabica-producing region, received rainfall above the historical average during mid-February. Adequate moisture during key crop development stages has strengthened expectations for higher yields, adding pressure to prices that have already retreated from recent highs.

Vietnam has also played a role in easing supply concerns. As the world’s leading robusta producer, the country reported a sharp year-on-year increase in coffee exports in January, according to official statistics. Full-year 2025 exports also recorded solid growth. Production for the 2025/26 season is projected to reach approximately 1.76 million metric tons, or about 29.4 million bags, reflecting a four-year high. The expansion in Vietnamese output continues to influence the robusta segment in particular.

Exchange-monitored inventories have shown signs of recovery as well. Certified arabica stocks tracked by ICE have risen from their lows reached late last year, while robusta inventories have also moved higher after touching multi-month troughs. The increase in available certified stocks signals improved short-term supply availability.

At the same time, some supply-side developments have provided limited support. Brazil’s Trade Ministry reported a year-on-year decline in January coffee exports. In Colombia, the National Federation of Coffee Growers announced that January production fell sharply compared with the same month last year, tightening availability in the washed arabica segment.

On the global level, the International Coffee Organization has reported a slight decline in coffee exports for the current October–September marketing year. However, the broader outlook remains shaped by expectations of higher output. The USDA Foreign Agricultural Service projects world coffee production in 2025/26 at nearly 179 million bags, with robusta output increasing while arabica production is forecast to decline modestly. Ending stocks are expected to ease compared with the previous season.

Overall, improved crop prospects in Brazil, expanding robusta production in Vietnam, and recovering inventories are collectively reshaping the global coffee balance, placing downward pressure on prices as the market reassesses supply risks.

Coffee Prices Sink as Brazil Rainfall Outlook Improves

Posted on by Qahwa World

Dubai – Qahwa World

Coffee futures faced a sharp retreat on Friday, with Arabica falling -13.25 (-3.85%) to a five-and-a-half-month low, and Robusta sliding -66 (-1.58%) to a three-and-a-half-week low. The primary downward pressure stems from weather forecasts predicting steady, beneficial rains over the next week in Minas Gerais, Brazil’s premier coffee-growing region.

The bearish sentiment is further reinforced by an ample supply outlook. Brazil’s crop agency, Conab, recently raised its 2025 production estimate to 56.54 million bags, a 2.4% increase from previous forecasts. Simultaneously, Vietnam—the world’s top Robusta producer—reported a 17.5% year-over-year surge in 2025 exports, reaching 1.58 MMT. Vietnam’s 2025/26 output is projected to climb another 6% to a four-year high, potentially reaching 10% growth if favorable weather holds.

Inventory recoveries at the Intercontinental Exchange (ICE) have added to the price pressure. Arabica inventories rose to a two-and-a-half-month high of 461,829 bags in mid-January, while Robusta inventories hit a seven-week high of 4,609 lots last Friday.

However, some factors continue to provide underlying support. Cecafe reported that Brazil’s December green coffee exports dropped 18.4% to 2.86 million bags, with Robusta exports specifically plummeting 61%. Additionally, while rains are forecasted, recent data shows that Minas Gerais received only 53% of its historical average rainfall in mid-January.

Looking ahead, the USDA’s Foreign Agriculture Service projects record global production of 178.848 million bags for 2025/26. While Arabica production may see a 4.7% dip, a significant 10.9% increase in Robusta output is expected to drive global totals to new heights, even as global ending stocks are forecasted to tighten slightly.