Dubai – Qahwa World
Coffee prices soared to two-week highs on Friday amid forecasts of worsening dry conditions across Brazil during the critical flowering phase of the 2026/27 crop. December arabica futures rose 3.35%, while November robusta gained 4.74%, driven by fears that heat and drought could damage trees in the world’s largest coffee-producing country.
Climatempo reported that Brazil’s coffee regions will experience intensified dryness and above-normal temperatures in the coming week, raising concerns about yield losses. At the same time, remnants of Typhoon Bualoi have brought heavy rains and flooding to Vietnam’s Central Highlands, disrupting coffee farms and transport routes in the world’s top robusta producer.
The situation is further complicated by a 50% tariff on U.S. imports of Brazilian coffee, which has led to declining inventories. ICE-monitored arabica stocks fell to a one-and-a-half-year low of 538,606 bags, while robusta inventories dropped to a 2.25-month low of 6,345 lots. American buyers have reportedly canceled new contracts for Brazilian beans, tightening supply in the U.S. market.
Adding to bullish sentiment, the U.S. National Oceanic and Atmospheric Administration raised the probability of a La Niña event to 71% for the October–December period, which could bring even drier weather to South America. Brazil’s crop agency, Conab, has already cut its 2025 arabica crop estimate by 4.9% to 35.2 million bags and total coffee production by 0.9% to 55.2 million bags.
The International Coffee Organization reported that global exports fell 1.6% in July compared to a year earlier, while Brazil’s Trade Ministry said unroasted coffee exports dropped 20.4% in the same month. Exporter group Cecafe noted a 28% decline in green coffee shipments to 2.4 million bags, with arabica exports down 21% and robusta plunging 49%.
Meanwhile, Vietnam’s 2025/26 crop is expected to rise 6% year-on-year to 1.76 million metric tons, the highest in four years, with exports increasing 7.8% to 1.14 million tons.
According to the U.S. Department of Agriculture, global coffee production for 2025/26 is forecast to reach a record 178.68 million bags, mainly supported by robusta output. However, trading firm Volcafe expects an arabica deficit of 8.5 million bags — the fifth consecutive year of shortages.
Overall, weather extremes, trade tariffs, and shrinking inventories are keeping global coffee markets on edge, reinforcing expectations of tighter supplies and elevated prices in the months ahead.
