Tag: global supply

ICO Coffee Market Report April 2026: Global prices fall 2.7% as supply outlook outweighs Strait of Hormuz disruption

Posted on by Qahwa World

Author: Qahwa World – London

Source: International Coffee Organization (ICO) – Coffee Market Report, April 2026
Report number: N/A (monthly market report)
Date: May 2026

ICO Composite Indicator Price averages 266.24 US cents/lb; Robusta drops 6.9% (fifth consecutive monthly decline); certified stocks remain at historically low levels.

LONDON, May 2026 — The International Coffee Organization (ICO) Composite Indicator Price (I‑CIP) averaged 266.24 US cents per pound in April 2026, a 2.7 percent decrease from March 2026. The market balanced two opposing forces: the closure of the Strait of Hormuz since 4 March, which pushed crude oil prices up by 55.8 percent and shipping freight costs by 43.6 percent between 27 February and 30 April, against a continued improvement in the global supply outlook. On balance, the supply‑side factor outweighed the geopolitical disruption, erasing most of March’s gains.

All coffee groups recorded losses in April, with Robusta suffering the steepest decline. The ICO report highlights that since the end of coffee year 2024/25, Robusta prices have dropped 21.9 percent, while the I‑CIP fell 18.0 percent and the three Arabica groups declined by an average of 16.9 percent. The sharper downturn in Robusta is attributed to improved supply availability — Robusta green bean exports rose 16.7 percent in the first half of 2025/26 — and a 4.5 percentage point increase in its share of total green exports.

Key takeaway: The market has largely priced in the war, while fundamentals (supply and demand) are now driving prices downward. The I‑CIP dropped 2.7% in April, compared to a 2.3% increase in March when geopolitical fears dominated.

Price performance by group and futures markets

The Colombian Milds and Other Milds both contracted by 0.9 percent in April, averaging 334.56 and 331.32 US cents/lb respectively. Brazilian Naturals fell 2.1 percent to 313.76 US cents/lb. Robusta declined 6.9 percent to 164.64 US cents/lb. At the futures level, the London ICE Robusta market dropped 7.0 percent to 150.65 US cents/lb, while New York ICE Arabica fell 1.9 percent to 284.63 US cents/lb.

IndicatorMarch 2026April 2026ChangeICO Composite (US cents/lb)273.70266.29-2.7%Colombian Milds337.45334.52-0.9%Other Milds334.34331.52-0.8%Brazilian Naturals320.51314.29-1.9%Robustas176.77164.17-7.1%New York ICE (Arabica)290.18284.75-1.9%London ICE (Robusta)161.91150.19-7.2%

Strait of Hormuz blockage: a lasting impact on input costs

Since 4 March 2026, shipping flows through the Strait of Hormuz have remained disrupted. Around one‑fifth of the world’s oil supply passes through this corridor. Between 27 February and 30 April, Brent crude rose from US$73.23/bbl to US$114.09/bbl, an increase of 55.8 percent. The Containerized Freight Index climbed from 1,331.1 to 1,911.4 points, a 43.6 percent rise. Fertilizer urea price jumped 47 percent from US$465/t to US$682/t over the same two‑month period. The Gulf region is a major fertilizer producer; Qatar Fertiliser Company alone accounts for about 14 percent of global urea production. The ICO notes that the increase in urea prices will hit high‑input coffee origins most severely, especially producers who have not secured fertilizers in advance for the main nitrogen application period supporting flowering for the next harvest.

Global supply outlook improves – market forecasts point to larger crops

Throughout March and April, several market players released optimistic projections. On 18 March, Scaufina projected Brazil’s 2026/27 crop to be up 15.5 percent year‑on‑year. On 19 March, Marex Group projected a 14.3 percent increase. On 2 April, StoneX projected global 2026 production at 182.5 million bags, an increase of 9.6 percent over the previous year, and forecast world stocks to rise to 48.2 million bags from 38.3 million in 2025.

These fundamentals gained the upper hand in April, as the market appeared to have already factored in the war. The I‑CIP’s 2.7 percent decline reversed the 2.3 percent increase seen in March, when geopolitical shocks dominated.

Price differentials and arbitrage

The Colombian Milds–Other Milds differential widened slightly from 3.12 to 3.34 US cents/lb. The Colombian Milds–Brazilian Naturals differential grew 22.7 percent to 20.8 US cents/lb. The arbitrage between New York and London futures markets increased 4.5 percent to 133.99 US cents/lb in April, the second consecutive monthly increase. The arbitrage ratio (New York/London) stood at 1.89, above the historical average of 1.75 (January 2018 to May 2025). The ratio has remained above the historic average for 11 of the past 12 months, indicating a return to more typical arbitrage levels.

Volatility declines across all indicators

Intra‑day volatility of the I‑CIP averaged 9.0 percent in April, down 0.8 percentage points from March. Colombian Milds volatility fell to 8.5 percent, Other Milds to 8.8 percent, Brazilian Naturals to 9.7 percent, and Robustas to 10.7 percent. New York futures volatility decreased to 10.0 percent, London to 11.0 percent.

Certified stocks remain at historic lows

London certified Robusta stocks fell 5.5 percent month‑on‑month to 0.65 million bags in April. US certified Arabica stocks dropped 10.1 percent to 0.55 million bags. Stock levels have stabilized in the last six months but remain at historically very low levels. From January 2010 to December 2021, average total ICE stocks were 4.87 million bags. Since the end of 2021, total certified stocks have stayed below 3.0 million bags. Calculated as months of EU and US consumption, current stocks represent just 0.22 months’ worth, compared to an average of 0.91 months between 2010 and 2021.

Green bean exports: mixed performance by group

Global green bean exports in March 2026 rose 0.8 percent to 11.7 million bags. Robusta exports surged 24.0 percent to a record 5.52 million bags, driven by Vietnam (up 30.3 percent to 3.67 million bags) and supported by Brazil and India. Colombian Milds exports fell 33.8 percent to 0.88 million bags, the fifth consecutive monthly decline, as Colombia’s exports dropped 37.4 percent due to falling local supply. Other Milds exports edged up 0.9 percent to 2.59 million bags, led by Honduras (+19.3%). Brazilian Naturals exports declined 16.8 percent to 2.71 million bags, marking the 13th consecutive month of negative growth, driven primarily by Brazil.

Total Arabica exports fell 13.6 percent to 6.18 million bags in March 2026. As a result, Arabica’s share of total green bean exports for the first six months of 2025/26 fell to 59.6 percent from 64.5 percent a year earlier.

Coffee group March 2025 (million bags) March 2026 (million bags) Change
Robustas 4.45 5.52 +24.0%
Colombian Milds 1.33 0.88 -33.8%
Other Milds 2.57 2.59 +0.9%
Brazilian Naturals 3.26 2.71 -16.8%

Total exports by region (all forms of coffee)

Global exports of all forms of coffee increased 1.6 percent to 13.59 million bags in March 2026. Asia & Oceania led growth with a 13.1 percent rise to 5.82 million bags, driven by Vietnam’s 25.1 percent increase to 4.3 million bags – the country’s largest‑ever March export volume and second‑highest monthly volume on record. This was partly offset by Indonesia, whose exports fell an estimated 47.6 percent to 0.45 million bags.

Africa’s exports fell 14.7 percent to 1.4 million bags, led by Ethiopia (down 29.7% to 0.44 million bags). South America’s exports declined 8.3 percent to 4.07 million bags, with Colombia down 28.5 percent to 0.9 million bags – the fourth consecutive monthly downturn. The Caribbean, Mexico & Central America rose 7.1 percent to 2.3 million bags, led by Honduras (+19.3%).

Exports by form: soluble coffee up 6.6%

Green beans accounted for 85.23 percent of total exports in the first half of 2025/26, soluble coffee 14.21 percent, and roasted coffee 0.56 percent. Soluble coffee exports rose 6.6 percent to 1.82 million bags in March 2026, with Vietnam (0.56 million bags), Brazil (0.4 million), and India (0.28 million) as the largest shippers. Roasted bean exports increased 21.0 percent to 0.07 million bags.

Global supply/demand balance

According to ICO data, 2023/24 world production reached 177.5 million bags, up 5.2 percent from the previous year. Arabica production rose 4.5 percent to 102.1 million bags, Robusta 6.2 percent to 75.4 million bags. Consumption in 2023/24 was 175.1 million bags, up 1.4 percent, resulting in a positive balance of 2.44 million bags – the first surplus after three consecutive deficits.

Frequently Asked Questions

  • What was the ICO Composite Indicator Price in April 2026?
The I‑CIP averaged 266.24 US cents per pound, a 2.7 percent decrease from March 2026.
  • How much have Robusta prices fallen since the end of coffee year 2024/25?
Robusta prices have dropped 21.9 percent since the end of coffee year 2024/25, while the I‑CIP fell 18.0 percent and the three Arabica groups declined by an average of 16.9 percent.
  • How did the Strait of Hormuz closure affect shipping and fertilizer costs?
The Containerized Freight Index rose 43.6 percent and urea prices jumped 47 percent between 27 February and 30 April 2026.
  • What are market analysts forecasting for Brazil’s 2026/27 crop?
Scaufina projected a 15.5 percent increase, and Marex Group projected a 14.3 percent increase year‑on‑year.
  • How much green Robusta coffee was exported in March 2026?
Robusta green bean exports reached 5.52 million bags, a 24.0 percent increase from March 2025, the largest ever monthly volume on record.
  • What is the current level of certified stocks compared to historical averages?
Current certified stocks represent just 0.22 months of EU and US consumption, compared to an average of 0.91 months between 2010 and 2021.
Source: International Coffee Organization (ICO) – Coffee Market Report, April 2026 (published May 2026). All figures and analysis are strictly based on the original report. No external data has been added.

Related Stories:

March 2026 Coffee Market Report: Global Prices Rebound Amid Geopolitical Tension

ICO February 2026 Report: Has the Inflationary Wave Receded?

Global Coffee Market Roadmap—January 2026

ICO Releases Global Coffee Market Report – December 2025

 

Iran War Drives Up Coffee Production Costs and Threatens Future Supply

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Dubai – Qahwa World

The ongoing war involving Iran is increasing production costs in the global coffee sector, mainly due to rising fertilizer prices. These higher costs are raising concern among producers, analysts, and financial institutions about future supply and added pressure on smallholder farmers.

Recent industry assessments indicate that the current harvest cycle is mostly secure because key inputs have already been applied. However, the bigger risk is for the 2026/27 season if disruptions continue.

The situation is closely linked to instability in energy and fertilizer markets. The conflict has disrupted trade routes such as the Strait of Hormuz, an important passage for oil, gas, and agricultural inputs. This has contributed to higher global prices for fuel and fertilizers, both essential for coffee farming.

Fertilizer markets are under strain. Prices for key inputs like urea have increased significantly since the conflict began. Because fertilizer production depends heavily on natural gas, rising energy costs are making the situation worse.

For coffee farmers, especially smallholders, these increases are serious. Fertilizer represents a large part of production costs, and many farmers do not have strong financial protection against price swings. This directly affects their profitability.

In major coffee-producing countries, many growers rely on imported inputs, which makes them vulnerable to global supply shocks. At the same time, they are also dealing with currency changes, climate pressures, and labor shortages.

If the conflict continues to disrupt supply chains and energy markets, coffee production costs may keep rising, which could affect future harvest levels and global coffee supply.

Coffee Prices Rise Amid Supply Concerns and Shipping Disruptions

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Dubai – Qahwa World

Coffee futures moved higher, supported by growing concerns over global supply disruptions and tightening inventories. Arabica and robusta contracts both posted gains, with robusta showing stronger momentum.

A key driver behind the price increase is rising tension around the Strait of Hormuz. Reports of shipping disruptions have heightened concerns about global trade flows, leading to increased freight costs, insurance premiums, and fuel expenses. These factors are adding pressure on coffee importers and roasters, contributing to upward price movement.

Robusta prices are receiving additional support from declining exchange inventories, which have dropped to their lowest level in over a year. This signals tighter short-term availability in the market.

However, expectations of a large upcoming harvest in Brazil are limiting stronger price rallies. Several industry forecasts point to a record crop for the 2026/27 season, with projections consistently above 75 million bags. At the same time, estimates suggest a significant global surplus could emerge in 2026, potentially the largest in several years.

Vietnam’s export performance is also weighing on the market, particularly for robusta. Shipments have increased notably in early 2026, following strong export growth in the previous year. Production in Vietnam is also expected to rise, reaching multi-year highs, which could further ease supply constraints.

On the other hand, reduced exports from Brazil are offering some support to prices. Recent data shows a decline in shipments compared to last year, tightening near-term availability in the global market.

Weather conditions in Brazil remain another important factor. Below-average rainfall in key growing regions, particularly Minas Gerais, has raised concerns about crop yields, adding a bullish element to price outlooks.

Looking at the broader picture, global export volumes have shown slight weakness, while production forecasts indicate modest overall growth. Arabica output is expected to decline, while robusta production is projected to increase significantly. Meanwhile, global coffee inventories are forecast to shrink, suggesting that supply pressures may persist despite higher production in some regions.

Coffee Markets Decline as Supply Fears Subside

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Dubai – Qahwa World

Coffee futures moved lower at the end of the week, with both arabica and robusta contracts posting notable losses. Arabica dropped to its lowest level in about a week, while robusta also weakened.

The decline was linked in part to improving conditions in global shipping. Iran’s announcement that the Strait of Hormuz has reopened helped calm earlier concerns about disruptions, suggesting smoother trade flows and reducing anxiety over supply constraints.

Earlier in the week, arabica had already been under pressure, touching a one-month low as expectations grew for a strong harvest in Brazil. Several industry forecasts point toward a record crop in the 2026/27 season, with estimates clustering above 75 million bags. Some analysts also anticipate a significant expansion in the global coffee surplus, potentially reaching its highest level in several years.

Meanwhile, Vietnam continues to play a major role on the supply side. The country, the leading producer of robusta coffee, has reported rising export volumes. Shipments in the first quarter increased compared to the same period last year, and full-year exports have also shown solid growth. Production in the current season is expected to climb to a multi-year high, adding further pressure to prices.

Despite this broader supply outlook, some factors are offering limited support. Inventories of robusta monitored by the ICE exchange have declined to their lowest level in over a year, indicating tighter availability in certified stocks.

In Brazil, export data has been mixed. Recent figures show a drop in shipments compared to last year, which may lend some support to prices. Weather is also being closely watched, as below-average rainfall in key growing regions like Minas Gerais could affect crop yields.

On the global stage, export volumes have edged slightly lower in the current marketing year, according to international data. However, overall production is still expected to rise in the 2025/26 season, driven by gains in robusta output despite a projected decline in arabica production.

Looking ahead, forecasts suggest Brazil’s total production may ease slightly, while Vietnam’s output is likely to increase. At the same time, global ending stocks are expected to shrink, reflecting ongoing shifts in supply and demand dynamics.

Brazil Crop Expectations Weigh on Coffee Prices

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Dubai – Qahwa World

Coffee prices remain under pressure as the market continues to digest expectations of a large upcoming crop in Brazil. May arabica coffee declined by 0.65%, while May robusta slipped 0.69%, extending recent losses.

Arabica futures recently touched a three-week low, while robusta fell to its weakest nearby level in eight months. The downward trend is largely driven by forecasts pointing to record production in Brazil. Estimates from multiple analysts suggest the 2026/27 crop could reach between 75.3 and 75.9 million bags, representing a significant year-on-year increase.

At the same time, projections indicate a widening global coffee surplus. Estimates suggest the surplus could expand to 10 million bags in 2026, up sharply from 1.8 million bags in 2025, marking the largest surplus in six years.

Additional pressure is coming from Vietnam, the world’s leading robusta producer. Coffee exports from Vietnam rose 14% year-on-year in the first quarter, reaching 585,000 metric tons. Full-year exports in 2025 increased by 17.5%, while production for the 2025/26 season is expected to rise 6% to a four-year high.

Despite these bearish factors, some elements are offering support to prices. Weather conditions in Brazil remain a concern, with below-average rainfall in key growing regions such as Minas Gerais. Recent data shows rainfall at just 47% of the historical average, raising questions about crop development.

Supply dynamics are also mixed. Robusta inventories have tightened, with exchange-monitored stocks falling to a 15-month low. In contrast, arabica inventories have increased, reaching their highest level in over six months, adding further pressure to that segment of the market.

Export data from Brazil has provided some price support. Green coffee exports fell 27% year-on-year in February, while March exports dropped 31%, indicating a slowdown in shipments.

Looking back, coffee prices already experienced a sharp selloff in February, when arabica dropped to a 16.75-month low amid early signs of a strong Brazilian crop. Brazil’s official crop agency has projected a substantial increase in production, while global output is also expected to reach record levels in the 2026/27 season.

On a broader scale, global coffee production is forecast to rise modestly in 2025/26, driven by strong growth in robusta output, particularly from Vietnam. However, ending stocks are expected to decline, suggesting that supply tightness could still emerge in certain segments of the market.

Coffee Slides on Supply Surge Signals

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London – Qahwa World

Coffee futures dropped notably, with arabica hitting its lowest level in about a week and robusta sinking to a multi-month low. The decline comes as expectations grow for a significantly larger global supply, led by Brazil.

Forecasts from multiple analysts point to a record-breaking Brazilian harvest in the 2026/27 season, with estimates clustering around the mid-70 million bag range—marking a strong year-over-year increase. This optimistic outlook has weighed heavily on prices in recent sessions.

The downturn intensified as the U.S. dollar strengthened to its highest level in over ten months, adding further pressure to commodity markets, including coffee.

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Despite the broader bearish tone, some factors are offering support—particularly for robusta. Exchange-monitored inventories have tightened recently, signaling short-term supply constraints.

Logistical challenges have also emerged as shipping disruptions in key global routes have pushed up freight, insurance, and fuel costs, indirectly impacting coffee trade flows and pricing dynamics.

Weather conditions in Brazil remain another point of concern. Key growing regions have received less rainfall than usual, which could affect crop development if dryness persists.

On the inventory front, Arabica stocks tracked by exchanges have been rising, contributing to downward pressure on prices.

Read also: Roseville’s Coffee Passport brews community and business growth

Export data adds a mixed picture. Brazil reported a sharp decline in green coffee shipments in February compared to last year, alongside a broader drop in total coffee exports.

Earlier in the year, prices had already come under pressure following projections of a bumper crop in Brazil. Government and private forecasts have consistently pointed to strong production growth, especially in arabica output.

Globally, coffee supply is expected to expand further. Estimates suggest total production could reach new highs in the upcoming season, supported by gains in both Brazil and Vietnam.

Vietnam, the leading robusta producer, continues to boost exports, with shipments rising in the early months of the year. Production is also expected to increase, adding to global availability.

Meanwhile, some international data indicates only a slight dip in global exports so far this season, while overall production forecasts remain strong. However, ending stock levels are expected to tighten modestly, reflecting steady demand.

Coffee rallies hard as supply tightens and money flows back into the market

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Dubai – Qahwa World

You can feel it again—the market is tightening, and coffee is responding exactly the way it tends to when physical supply starts to disappear.

Over the past week, coffee prices pushed sharply higher, and this wasn’t just a technical move. It’s a combination the industry knows well: weaker exports from origin countries and fresh speculative money stepping back in. That mix rarely stays quiet for long.

Arabica for May delivery jumped 8.6% to around $6,828 per tonne, while robusta added another 6%, reaching $6,664. Both markets are moving in sync, which usually tells you this isn’t a localised issue—it’s systemic.

You may like to read: Indonesia’s Top 9 Coffees in 2026

At the same time, the broader commodity space is sending mixed signals. Silver dropped heavily under the weight of high interest rates, while coffee moved the other way. That divergence says a lot about where capital is going: away from passive holdings and into markets where supply risk is real and immediate.

  • And right now, coffee has plenty of that.

The geopolitical backdrop isn’t helping. Tensions in the Middle East have started to interfere with shipping through the Strait of Hormuz, pushing oil prices higher. For coffee producers, that translates directly into higher costs — fuel, fertilisers, transport — everything gets more expensive. Eventually, those costs show up in the price of coffee.

But the bigger story is still supply.

Exports from the major producers are clearly slowing:

Brazil saw green coffee exports drop 27% year-on-year in February
Vietnam was down 20%
Colombia fell even harder, down 32%

Those are not small adjustments — that’s a meaningful contraction across all key origins at the same time.

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What’s more telling is what’s happening on the exchange. ICE stocks — the market’s safety cushion — are still about 30% below last year, sitting just above 552,000 bags. And Brazilian coffee makes up only a tiny share of that, roughly 4%.

That’s important. When Brazil isn’t showing up in exchange stocks, it usually means producers aren’t satisfied with current price levels — or simply don’t feel pressure to sell. Either way, it tightens the market further.

On top of that, funds are coming back in. Managed money increased its net long position in arabica by nearly 30% in just one reporting period. That kind of move doesn’t happen unless confidence — or urgency — is building.

Locally, in Vietnam’s Central Highlands, prices followed the global trend, climbing to around 94,000 dong per kilo. That’s a strong move in a short time, and it reflects how quickly international pressure feeds into domestic markets.

Read also: 43 Years of Data: How Coffee Affects the Brain and Memory

  • Meanwhile, silver drops — and capital rotates

While coffee is climbing, silver is going through the opposite cycle.

Prices fell more than 14% last week, extending a steady run of losses. The main driver here isn’t supply — it’s macroeconomics.

With inflation in the U.S. still stubborn, interest rates remain elevated. That pushes bond yields higher and makes non-yielding assets like silver less attractive. Money simply moves elsewhere.

You can also see it in ETF flows. Holdings dropped by 225 tons in a single week — a clear sign that institutional investors are reducing exposure.

What’s interesting, though, is that the physical market is telling a different story. China imported over 790 tons of silver in the first two months of the year, with February hitting a record. At the same time, exchange inventories in both Shanghai and COMEX are shrinking fast.

So, while paper markets are selling, physical demand hasn’t gone away.

  • The bigger picture

What we’re seeing now is a classic divergence.

Coffee is being driven by real-world constraints — supply, logistics, and producer behavior.
Silver is being driven by financial conditions — rates, yields, and capital flows.

For coffee, the key question isn’t whether prices can move — they already are. The real question is how long supply remains tight and whether producers step in at these levels.

Until that happens, the market stays vulnerable to further upside.

Coffee Prices Rise on Supply Concerns

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Dubai – Qahwa World

Coffee futures rose on Monday, recovering from earlier losses as concerns over global supply disruptions supported the market.

May arabica gained 2.52 percent, rising 7.20 points, while May robusta edged up 0.46 percent, adding 16 points.

The rebound followed reports that the Strait of Hormuz has been closed, disrupting a key global shipping route. The development has pushed up freight rates, insurance costs, and fuel prices, increasing pressure on coffee importers and roasters worldwide.

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Earlier in the session, prices had moved lower as improved weather conditions in Brazil eased concerns about crop stress. Rainfall in Minas Gerais, the country’s main arabica-growing region, reached 57.7 millimeters last week, about 139 percent of the historical average.

Expectations of a large Brazilian harvest also continue to weigh on the market. StoneX recently raised its forecast for Brazil’s 2026 to 2027 coffee production to a record 75.3 million bags, up from 70.7 million.

Export data, however, provided some support. Figures from Cecafé showed Brazil’s green coffee exports fell 27 percent year on year in February to 2.3 million bags. Data from the country’s Trade Ministry also showed total coffee exports declined 17.4 percent to 142,000 metric tons.

Read also: Coffee Markets Rise Amid Middle East Shipping Disruptions

At the same time, rising inventories continue to weigh on prices. Arabica stocks monitored by Intercontinental Exchange climbed to 572,004 bags last week, the highest level in five and a half months. Robusta inventories also reached a three and a half month high earlier this month before easing slightly.

Coffee markets have been under pressure in recent weeks. In February, arabica fell to its lowest level in more than 15 months, while robusta dropped to a seven month low, largely due to expectations of a strong Brazilian crop.

Brazil’s crop agency Conab estimates 2026 production will rise 17.2 percent to 66.2 million bags. Arabica output is expected to increase 23.2 percent, while robusta production may grow 6.3 percent.

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Globally, Rabobank projects coffee production will reach a record 180 million bags in the 2026 to 2027 season, up by around 8 million bags from the previous year.

Strong supply from Vietnam has also added pressure to the market. Coffee exports from the country rose 14 percent in the first two months of 2026 to 366,000 metric tons, while full-year 2025 exports increased 17.5 percent. Production is expected to rise 6 percent to 1.76 million metric tons.

According to the International Coffee Organization, global coffee exports for the current season edged down 0.3 percent to 138.66 million bags. Meanwhile, the USDA Foreign Agricultural Service forecasts global production will increase 2 percent to a record 178.85 million bags, even as ending stocks are expected to decline by 5.4 percent to 20.15 million bags.

Coffee Prices Plunge on Rising Global Supply

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DUBAI – QAHWA WORLD

Coffee futures fell sharply on Tuesday, pressured by improving global supply expectations and stronger production forecasts from key producing countries.

March arabica coffee contracts dropped 5.15%, settling at a 7.25-month low. March robusta futures declined 4.44%, marking a six-month low. The downturn extends a three-week slide driven largely by expectations of a bumper crop in Brazil.

According to Brazil’s crop forecasting agency Conab, the country’s 2026 coffee production is projected to rise 17.2% year-over-year to a record 66.2 million bags. Arabica output is expected to increase 23.2% to 44.1 million bags, while robusta production is forecast to climb 6.3% to 22.1 million bags.

Weather conditions have also supported the bearish outlook. Somar Meteorologia reported that Minas Gerais — Brazil’s largest arabica-growing region — received 72.6 mm of rainfall during the week ending February 6, representing 113% of the historical average.

Additional pressure came from Vietnam, the world’s largest robusta producer. Data from Vietnam’s National Statistics Office showed January coffee exports surged 38.3% year-over-year to 198,000 metric tons. Full-year 2025 exports rose 17.5% to 1.58 million metric tons. Production for the 2025/26 season is projected to increase 6% to 1.76 million metric tons (29.4 million bags), the highest level in four years.

Rising exchange inventories have also weighed on prices. Intercontinental Exchange-monitored arabica stocks rebounded from a 1.75-year low of 396,513 bags in mid-November to 461,829 bags in early January. Robusta inventories likewise recovered from a 13-month low of 4,012 lots in December to 4,662 lots in late January.

On the supportive side, Brazil’s Trade Ministry reported a 42.4% year-over-year decline in January coffee exports to 141,000 metric tons. Meanwhile, production in Colombia — the world’s second-largest arabica producer — fell 34% in January to 893,000 bags, according to the National Federation of Coffee Growers.

Globally, supply signals remain mixed. The International Coffee Organization reported that exports for the current marketing year (October–September) slipped 0.3% year-over-year to 138.658 million bags.

In its latest bi-annual outlook, the U.S. Department of Agriculture’s Foreign Agricultural Service projected that global coffee production for 2025/26 will rise 2.0% to a record 178.848 million bags. Arabica output is forecast to decline 4.7% to 95.515 million bags, while robusta production is expected to jump 10.9% to 83.333 million bags.

The agency also estimates that global ending stocks for 2025/26 will decline 5.4% to 20.148 million bags, compared with 21.307 million bags in 2024/25 — suggesting that despite short-term pressure, underlying supply dynamics remain closely balanced.

Rain Forecasts in Brazil Pressure Arabica Coffee Prices Despite Tight Global Supply

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Dubai – Qahwa World

Arabica coffee prices fell sharply on Thursday as forecasts of much-needed rainfall in Brazil’s key coffee-growing regions eased concerns about prolonged dryness that had recently pushed prices higher. Meanwhile, robusta prices edged up, supported by steady demand and limited inventories.

On the Intercontinental Exchange (ICE), December arabica (KCZ25) closed down –7.85 cents (–2.04%) at 297.05 U.S. cents per pound, while November robusta (RMX25) gained +26 points (+0.57%), reaching a three-week high.

Brazil Weather Outlook

According to Brazilian meteorological agency Climatempo, parts of Minas Gerais — the country’s largest arabica-producing region — could receive up to 30 millimeters of rain this week, a “significant amount” expected to promote flowering for the 2026/27 crop cycle. The prospect of rainfall led to profit-taking after recent price gains fueled by drought concerns.

Earlier this week, Somar Meteorologia reported that Minas Gerais received only 0.9 millimeters of rain during the week ended October 4 — just 3% of the historical average — raising fears of poor flowering and lower yields before these latest forecasts.

Inventory and Trade Developments

While weather news weighed on prices, global supply signals remained tight. ICE-monitored arabica inventories fell to a 1.5-year low of 519,534 bags on Thursday, while robusta inventories hit a 2.5-month low of 6,237 lots. The sharp drawdown is partly linked to the 50% tariff on U.S. imports of Brazilian coffee, which has caused American buyers to void new contracts and tightened U.S. supplies. Brazil accounts for around one-third of America’s unroasted coffee imports.

At the same time, the International Coffee Organization (ICO) reported that global coffee exports for the current marketing year (Oct–Aug) rose by 0.2% year on year to 127.92 million bags, indicating adequate supply in the short term but little room for further tightening.

Production and Export Trends

Brazil’s crop forecaster Conab recently revised down its 2025 arabica crop estimate by 4.9% to 35.2 million bags (from 37 million in May) and cut total coffee output to 55.2 million bags (from 55.7 million). Meanwhile, Cecafé, the Brazilian exporters’ association, said coffee shipments fell 21% in the first seven months of the year to 22.2 million bags and plunged 28% in July alone.

In contrast, Vietnam — the world’s largest producer of robusta — is seeing strong growth. The Vietnam National Statistics Office reported that coffee exports from January to September 2025 rose 10.9% to 1.23 million metric tons, with the 2025/26 harvest expected to increase 6% to 1.76 million tons (29.4 million bags), a four-year high.

Global Outlook

The U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) forecasts global coffee production in 2025/26 to reach a record 178.68 million bags, up 2.5% year on year. Within that total, arabica output is expected to decline 1.7% to 97.02 million bags, while robusta is projected to rise 7.9% to 81.65 million bags. Ending stocks are forecast to increase by 4.9% to 22.82 million bags.

However, trader Volcafe projects a global arabica deficit of 8.5 million bags for 2025/26 — wider than the 5.5 million bag deficit in 2024/25 — marking the fifth consecutive year of shortfall.

Adding to market uncertainty, the U.S. National Oceanic and Atmospheric Administration (NOAA) on September 16 raised the probability of a La Niña event between October and December to 71%. Such conditions can cause dry weather in South America and potentially damage Brazil’s next coffee crop, maintaining a tense balance between short-term relief and long-term risk.

Market Summary

For now, traders remain focused on Brazil’s rainfall patterns and their impact on flowering and yields. If forecasted rains fail to materialize, a renewed price rebound could follow as concerns about crop development resurface. Conversely, consistent rainfall in October could alleviate some supply pressures and bring temporary stability to arabica prices.