Delayed Brazil Coffee Harvest Lifts Arabica Prices

September arabica coffee (KCU26) on Monday closed up +4.60 (+1.68%), and September ICE robusta coffee (RMU26) closed down -63 (-1.74%).

Coffee prices settled mixed on Monday.  Arabica coffee rallied sharply on Monday as heavy rains in Brazil are delaying the country’s coffee harvest.  Somar Meteorologia reported on Monday that rainfall in Minas Gerais, Brazil’s biggest coffee-growing region, was 31.3 mm of rain in the week through June 28, or 1,956% of the historical average.  Robusta coffee retreated on Monday amid signs of increasing supplies after ICE robusta coffee inventories rose to a 2.75-month high. 

Coffee prices have moved sharply higher over the past two weeks, with robusta posting a 4.5-month high last Thursday and arabica posting a 1.5-month high last Wednesday.  Recent heavy rains in Brazil have disrupted field activities and may have lowered the quality of the coffee crop. 

ICE coffee inventories have trended lower over the past three months, which is also supportive of coffee prices.  ICE arabica coffee inventories fell to a 2.25-year low of 380,534 bags on Monday. Meanwhile, ICE robusta inventories fell to a 2-year low of 3,631 lots on May 15 but jumped to a 2.75-month high of 4,053 lots on Monday.

Concerns that an El Niño weather pattern could hurt Brazil’s coffee crop next year are bullish for prices. Coffee trader Commercial said the El Niño weather pattern may delay rains in Brazil this September and October, when tree flowering normally occurs, hurting Brazil’s 2026/27 coffee crop. 

The US National Oceanic and Atmospheric Administration (NOAA) estimates a 67% probability of a “Super El Niño” this year that could be the strongest on record.  On June 10, 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. 

On June 9, arabica coffee fell to a 19-month nearest-futures low, and robusta slid to a 2-month low, amid an outlook for a bumper coffee crop in Brazil this year.  On June 3, the USDA’s Foreign Agricultural Service (FAS) forecast a record 2026/27 Brazil coffee crop of 71.9 million bags, up +14% y/y.  Also, Rabobank raised its 2026/27 global arabica coffee surplus estimate to 9.5 million bags from 7.0 million bags previously.  Meanwhile, Cecafe reported June 11 that Brazil’s May green coffee exports rose +4.2% y/y to 2.73 million bags.

Soaring coffee exports from Vietnam, the world’s largest robusta producer, are bearish for robusta prices.  On June 2, Vietnam’s National Statistics Office reported that Vietnam’s 2026 coffee exports (Jan-May) rose by +7.9% y/y to 922,000 MT.  Vietnam’s 2025 coffee exports jumped by +17.5% y/y to 1.58 MMT. Also, Vietnam’s 2025/26 coffee production is projected to climb +6% y/y to a 4-year high of 1.76 MMT (29.4 million bags).

As a bearish factor, the International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (Oct-Sep) fell -0.3% y/y to 138.658 million bags.

The USDA’s Foreign Agriculture Service (FAS) bi-annual report on December 18 projected that world coffee production in 2025/26 will increase by +2.0% y/y to a record 178.848 million bags, with a -4.7% decrease in arabica production to 95.515 million bags and a +10.9% increase in robusta production to 83.333 million bags.  FAS forecasted that Brazil’s 2025/26 coffee production will decline by -3.1% y/y to 63 million bags and that Vietnam’s 2025/26 coffee output will rise by 6.2% y/y to a 4-year high of 30.8 million bags. FAS forecasts that 2025/26 ending stocks will fall by -5.4% to 20.148 million bags from 21.307 million bags in 2024/25.