Author: Qahwa World |
Date: June 8, 2026
Brazil Coffee Harvest Pressures Weigh on Prices
Key Takeaways:
- July arabica futures fell 0.37% today; July robusta rose 0.60%.
- Arabica hit a 19-month low last week, robusta a 7-week low.
- USDA forecasts a record Brazil 2026/27 crop of 71.9 million bags, up 14% year on year.
- Rabobank raised its global arabica surplus estimate to 9.5 million bags.
- Vietnam’s coffee exports rose 7.9% in the first five months of 2026.
- ICE arabica inventories fell to a 5.75-month low of 419,504 bags.
- El Niño risks and Strait of Hormuz closure provide price support.
Coffee prices traded mixed today as the ongoing harvest in Brazil continues to weigh on prices. July arabica futures fell 0.37%, while July robusta rose 0.60%. Weakness in the Brazilian real, which fell to a two-month low against the dollar, also pressured prices by encouraging export sales from Brazilian producers.
Last week, arabica fell to a 19-month low, and robusta slid to a seven-week low. The outlook for a record Brazil coffee crop remains the primary bearish factor, though some supportive elements exist.
Record Brazil Crop Forecast Weighs on Prices
Last Wednesday, the USDA Foreign Agricultural Service (FAS) forecast a record 2026/27 Brazil coffee crop of 71.9 million bags. That is a 14% increase year on year. Rabobank also raised its 2026/27 global arabica surplus estimate to 9.5 million bags, up 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.
As a result, coffee prices have trended lower over the past six weeks amid an improved global supply outlook. StoneX projects the 2026 global coffee surplus will expand to 10 million bags, up from 1.8 million bags in 2025. That would be 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 5.75-month low of 419,504 bags last Friday. ICE robusta inventories fell to a two-year low of 3,631 lots on May 15 and are now slightly higher at 3,732 lots. The decline in inventories provides some support to prices.
El Niño Concerns and Strait Disruptions Support Prices
Concerns are growing that an El Niño weather pattern could hurt Brazil’s coffee crop next year. Coffee trader Commercial stated that El Niño may delay rains in Brazil during September and October, when tree flowering normally occurs. That would damage the 2026/27 crop.
The US National Oceanic and Atmospheric Administration (NOAA) estimates an 82% probability that El Niño conditions will emerge between May and July and persist through the end of the year. There is a 67% chance of a “Super El Niño.”
Moreover, the ongoing closure of the Strait of Hormuz has disrupted 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.
On the bearish side, 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.
| 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% |
Ending Stocks Continue to Decline
The USDA FAS 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 comes despite higher production expectations. It reflects strong global demand and persistent supply chain pressures.
However, prices may face additional pressure if large surplus forecasts materialize, especially with recovering production in Brazil and Vietnam. Investors remain watchful of weather developments in South America and geopolitical tensions in the Arabian Gulf region.
Frequently Asked Questions About Coffee Price Movements
Q: Why are arabica prices falling despite lower exchange inventories?
A: Because of record Brazil crop forecasts and rising Vietnam exports, which increase global supply and weigh on prices.
Q: How do Vietnam’s exports affect robusta prices?
A: Rising Vietnamese exports increase global robusta supply, putting downward pressure on prices.
Q: What is the impact of El Niño on coffee prices?
A: El Niño could delay rains in Brazil, harming tree flowering and reducing next year’s crop. This would support higher prices.
Q: How does the Strait of Hormuz closure affect the coffee market?
A: The closure disrupts shipping routes and raises transport, insurance, and fuel costs, increasing costs for importers and roasters.
Q: What is the global coffee surplus forecast for 2026?
A: StoneX expects the surplus to reach 10 million bags, the largest in six years, driven by higher production in Brazil and Vietnam.
The coffee market remains torn between large surplus expectations on one hand and tight spot supplies, weather risks, and geopolitical tensions on the other. Investors continue to monitor exchange inventories and weather developments in Brazil closely.
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 8, 2026
