Tag: USDA coffee forecast

Coffee Prices Supported by Shrinking ICE Inventories as Supply Tightens

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Author: Qahwa World – Dubai. This article reviews ICE coffee inventories and coffee prices projections for 2026.

Source: Industry reports and exchange data
Date: May 14, 2026

Executive Summary

  • July arabica coffee gained 0.21%, while July robusta rose 2.24% to a seven-week high
  • ICE robusta inventories fell to a two-year low of 3,642 lots
  • ICE arabica stocks dropped to a 2.5-month low of 471,831 bags
  • Brazil April green coffee exports declined 1.3% year-over-year to 2.76 million bags
  • Vietnam January-April coffee exports surged 15.8% to 810,000 metric tons
  • Global coffee surplus projected to reach 10 million bags in 2026, largest in six years

Coffee futures settled higher in Wednesday trading as shrinking exchange inventories continued to provide market support, with robusta prices climbing to their highest level in nearly two months.

July arabica coffee on the New York exchange rose 0.60 points, or 0.21 percent, while July robusta coffee on the London exchange advanced 78 points, or 2.24 percent, reaching a seven-week peak.

Tightening stocks on the Intercontinental Exchange remained the primary bullish factor for the market. Robusta inventories fell to a two-year low of 3,642 lots on Wednesday, while arabica stocks dropped to a two-and-a-half-month low of 471,831 bags earlier in the week.

Reduced shipments from Brazil also provided price support. The country’s April green coffee exports declined 1.3 percent compared to the same period last year, totaling 2.76 million bags, according to industry data.

Disruptions in key shipping routes have raised concerns over global coffee supply chains, contributing to higher costs for freight, insurance, fertilizers, and fuel for importers and roasters.

On the bearish side, rising shipments from Vietnam, the world’s largest robusta producer, continued to weigh on the market. Vietnamese coffee exports during the first four months of 2026 increased 15.8 percent year-over-year to 810,000 metric tons. The country’s total coffee exports for 2025 also rose 17.5 percent to 1.58 million metric tons.

Supply outlook: Vietnam coffee production for the 2025/2026 season is projected to increase 6 percent to 1.76 million metric tons (29.4 million bags), which would mark a four-year high for the Southeast Asian producer.

Expectations of a larger Brazilian harvest are also placing downward pressure on prices. Recent projections indicate Brazil 2026/2027 coffee harvest could rise 12 percent year-over-year to 71.4 million bags.

Several trading firms have issued forecasts pointing to record production levels. A major commodities brokerage projected Brazil 2026/2027 crop at 75.9 million bags, while another trading firm raised its estimate to a record 75.3 million bags.

The global coffee surplus in 2026 could expand to 10 million bags, compared with 1.8 million bags in 2025, which would represent the largest surplus in six years, according to industry analysts.

Global coffee exports for the current October-September marketing year slipped 0.3 percent year-over-year to 138.66 million bags, based on data from the International Coffee Organization.

Looking further ahead, the United States Department of Agriculture Foreign Agricultural Service projects that global coffee production in 2025/2026 will rise 2 percent year-over-year to a record 178.85 million bags. The agency forecasts arabica production to decline 4.7 percent to 95.52 million bags, while robusta production is expected to increase 10.9 percent to 83.33 million bags.

Brazil production for 2025/2026 is forecast to fall 3.1 percent to 63 million bags, while Vietnam output is projected to rise 6.2 percent to a four-year high of 30.8 million bags.

The USDA also expects ending stocks for the 2025/2026 season to decline 5.4 percent to 20.15 million bags, down from 21.31 million bags in the previous season.

Frequently Asked Questions

Why did coffee prices rise recently?
Coffee prices moved higher primarily due to shrinking ICE inventories. Arabica stocks fell to a 2.5-month low, while robusta inventories dropped to a two-year low, tightening available supply.

How did Brazil coffee exports perform in April?
Brazil April green coffee exports declined 1.3 percent year-over-year to 2.76 million bags, providing some support to coffee prices.

What is happening with Vietnam coffee exports?
Vietnam coffee exports surged 15.8 percent in the first four months of 2026 to 810,000 metric tons, which has weighed on prices due to increased supply from the world largest robusta producer.

What is the global coffee surplus forecast for 2026?
The global coffee surplus in 2026 could expand to 10 million bags, up from 1.8 million bags in 2025, marking the largest surplus in six years.

What does the USDA forecast for global coffee production?
The USDA projects global coffee production will reach a record 178.85 million bags in 2025/2026, a 2 percent increase year-over-year, with robusta driving the growth.

How are Strait of Hormuz disruptions affecting coffee prices?
Disruptions in the Strait of Hormuz have raised concerns over global coffee supply chains, increasing shipping, insurance, fertilizer, and fuel costs for importers and roasters, which supports higher coffee prices.

Author: Qahwa World – Dubai
Source: Industry reports and exchange data
Date: May 14, 2026

 

Coffee Futures Rebound as Dollar Weakness Triggers Short Covering

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Dubai – Qahwa World

Coffee prices climbed back from one-and-a-half-week lows on Friday, ending the session in positive territory. The turnaround came as the U.S. dollar dropped to a two-week low, prompting traders to cover short positions in the coffee market. This price recovery was also influenced by coffee futures short covering as traders adjusted their positions. Notably, coffee futures short covering has played a key role in recent market movements.

July arabica coffee rose 0.85 cents (0.30%), while July robusta coffee gained 3 points (0.09%).

Early Losses on Brazil Crop Outlook

Prices initially moved lower on expectations of a larger harvest in Brazil. The Coffee Trading Academy projected Thursday that Brazil’s 2026/27 coffee crop would rise 12% year-over-year to 71.4 million bags.

Just days earlier, arabica had touched a 1.75-month low following forecasts of a record Brazilian harvest. On March 19, Marex Group predicted a record 75.9 million bags for 2026/27, beating Sucafina’s estimate of 75.4 million bags (up 15.5% annually). StoneX also raised its production outlook for Brazil to an all-time high of 75.3 million bags on March 12, up from a prior forecast of 70.7 million bags. Additionally, StoneX expects the global coffee surplus to balloon from 1.8 million bags in 2025 to 10 million bags in 2026 — the widest surplus in six years. As a result, coffee futures short covering activity may increase amid these predictions.

Vietnamese Exports Weigh on Robusta

Soaring shipments from Vietnam, the world’s top robusta producer, are putting pressure on robusta prices. Vietnam’s National Statistics Office reported on April 3 that first-quarter 2026 coffee exports rose 14% year-over-year to 585,000 metric tons. For all of 2025, exports jumped 17.5% to 1.58 million metric tons. Moreover, Vietnam’s 2025/26 production is expected to climb 6% to a four-year high of 1.76 million metric tons (29.4 million bags).

Supply Tightness Offers Support

On the bullish side, arabica supplies are showing signs of tightness. ICE arabica coffee inventories fell to a two-month low of 494,508 bags on Tuesday, contributing to coffee futures short covering by traders seeking to limit risk.

Similarly, robusta supplies are tightening — ICE robusta stocks dropped to a 16-month low of 3,755 lots last Tuesday.

Geopolitical and Export Factors

Ongoing concerns over a prolonged U.S.-Iran conflict and potential closure of the Strait of Hormuz are also supporting prices. Such disruptions have raised shipping rates, insurance premiums, and costs for fertilizers, fuel, importers, and roasters. Therefore, it is evident that coffee futures short covering remains a significant factor in this volatile environment.

Brazilian export data further supports prices. Cecafe reported on April 14 that Brazil’s March green coffee exports fell 10% year-over-year to 2.65 million bags. Brazil’s Trade Ministry also noted on April 7 that March coffee exports dropped 31% from a year ago to 151,000 metric tons.

Bearish Reports and Forecasts

On the downside, the International Coffee Organization (ICO) said on November 7 that global coffee exports for the current marketing year (October–September) edged down 0.3% year-over-year to 138.658 million bags.

The USDA’s Foreign Agriculture Service (FAS) projected in its December 18 biannual report that world coffee production for 2025/26 would rise 2% to a record 178.848 million bags. That includes a 4.7% drop in arabica output (to 95.515 million bags) and a 10.9% increase in robusta production (to 83.333 million bags). The FAS also forecast Brazil’s 2025/26 crop falling 3.1% to 63 million bags, while Vietnam’s output rises 6.2% to a four-year high of 30.8 million bags. Ending stocks for 2025/26 are expected to decline 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25.

Coffee Prices Drop as Supply Outlook Strengthens

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Dubai – Qahwa World

Coffee prices experienced a sharp decline on Monday, with arabica falling to a two-week low and robusta reaching a 2.25-month low. The downturn comes amid expectations of abundant global coffee supplies.

Brazil’s crop agency, Conab, recently raised its 2025 production forecast to 56.54 million bags, up from 55.20 million bags projected in September. Meanwhile, Vietnam’s National Statistics Office reported a 39% year-on-year increase in November coffee exports, reaching 88,000 metric tons, while January–November exports grew nearly 15% to 1.398 million metric tons.

Analysts at StoneX forecast that Brazil could produce 70.7 million bags in the 2026/27 marketing year, including 47.2 million bags of arabica—a 29% increase compared to the previous year.

The European Union’s recent one-year delay of its deforestation regulation (EUDR) is also influencing market sentiment. The measure, designed to curb deforestation in countries exporting key commodities to the EU, now allows continued imports of coffee, soybeans, and cocoa from regions experiencing deforestation, contributing to expectations of steady supply.

Weather conditions in Brazil are playing a mixed role. In the country’s largest arabica-producing region, Minas Gerais, rainfall was reported at just 11 mm for the week ending December 5, only 17% of the historical average—offering some support for prices.

U.S. coffee inventories monitored by ICE have tightened due to tariffs on Brazilian coffee imports. Arabica stocks fell to a 1.75-year low of 398,645 bags in late November, though they recently rebounded to over 426,000 bags. Robusta stocks dropped to an 11.5-month low on Monday. U.S. purchases of Brazilian coffee from August to October declined 52% year-on-year following the tariff implementation, reducing domestic supply.

On the other hand, increased production from Vietnam exerts downward pressure on prices. The country is expected to produce 1.76 million metric tons (29.4 million bags) in 2025/26, a four-year high, with the Vietnam Coffee and Cocoa Association projecting a 10% increase over the previous crop if favorable weather continues. Vietnam remains the world’s largest robusta producer.

Globally, signs of tighter supplies provide some price support. The International Coffee Organization reported a slight 0.3% year-on-year decline in global coffee exports for the current marketing year, totaling 138.658 million bags.

The USDA projects world coffee production in 2025/26 to reach a record 178.68 million bags, with arabica slightly down 1.7% to 97.022 million bags and robusta rising 7.9% to 81.658 million bags. Brazil’s output is expected to increase modestly to 65 million bags, while Vietnam’s crop could rise to a four-year high of 31 million bags. Global ending stocks are forecast to grow nearly 5% to 22.819 million bags.

Coffee Prices Soar to New 2-Month Highs Amid Brazil Frost and Falling Exports

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Dubai, August 16, 2025 (Qahwa World) – Coffee prices surged to their highest levels in two months on Friday, driven by frost concerns in Brazil, declining exports, and tightening global inventories. The rally pushed September Arabica coffee (KCU25) up 4.64% to close at +15.15, while September Robusta coffee (RMU25) gained 2.86% at +117. Over the week, Arabica rose +10.4% and Robusta +18%, marking one of the strongest weekly rallies of the year.

Brazil Frost Sparks Market Tensions

Early this week, a light frost was reported in Cerrado Mineiro, one of Brazil’s key Arabica-producing regions. While crop damage was limited, the event renewed market fears over frost risks during Brazil’s winter season. Weather events in Brazil remain a critical factor in global coffee price volatility.

Sharp Decline in Brazilian Exports

Brazil, the world’s largest coffee exporter, reported a 20.4% year-on-year drop in July unroasted coffee exports to 161,000 MT, according to its Trade Ministry. Exporter group Cecafe confirmed a steep decline, with green coffee exports down 28% y/y to 2.4 million bags. Within this, Arabica exports fell -21%, while Robusta exports plunged -49%.
From January to July, Brazil shipped 22.2 million bags, down -21% compared with last year.

Inventories at Multi-Year Lows

Declining ICE warehouse stocks further fueled bullish momentum. Arabica inventories hit a 1.25-year low of 726,661 bags on Thursday before rebounding slightly to 731,739 on Friday. Robusta inventories fell to a three-week low of 6,907 lots, below the recent two-year high of 7,029 lots reached in late July.

U.S. Tariffs Add Uncertainty

The market is awaiting clarity on U.S. trade policy, as President Trump has yet to exempt coffee from the proposed 50% tariff on Brazilian exports. Such a move could raise domestic inventories in Brazil while reshaping global trade flows.

Weather and Harvest Update

Above-average rainfall in Minas Gerais, Brazil’s largest Arabica region, brought 4.8 mm of precipitation last week, or 109% of the historical average, easing dryness concerns but weighing slightly on prices.
Meanwhile, Brazil’s 2025/26 harvest is nearing completion. Safras & Mercado reported 94% progress as of August 6, ahead of last year’s 92%. Cooxupe, Brazil’s largest cooperative, said its members had completed 80.4% of the harvest by August 8.

Global Coffee Exports and Vietnam Outlook

On the supply side, the International Coffee Organization (ICO) noted that global coffee exports rose +7.3% y/y in June to 11.69 million bags. However, cumulative exports from October to June dipped slightly by -0.2% y/y at 104.14 million bags.

Vietnam, the world’s second-largest producer, continues to face challenges. The country’s 2023/24 output fell 20% y/y to 1.472 million MT, the lowest in four years, due to drought. Exports in 2024 dropped -17.1% to 1.35 million MT. However, from January to July 2025, Vietnam’s shipments rose 6.9% y/y to 1.05 million MT, offering partial recovery.

USDA and Volcafe Projections

The USDA’s Foreign Agriculture Service (FAS) expects world coffee production to hit a record 178.68 million bags in 2025/26, up 2.5% year-on-year. Robusta output is forecast to surge by +7.9% to 81.65 million bags, while Arabica is projected to decline -1.7% to 97.02 million bags.
Despite this, Volcafe projects a widening global Arabica deficit of -8.5 million bags for 2025/26 – the fifth straight year of supply shortfalls – compared with a -5.5 million bag deficit last season.