Dubai – Qahwa World
Coffee prices climbed on Thursday as escalating tensions in the Middle East raised concerns about global supply chains and shipping routes.
May arabica coffee futures increased by 6.75 points (2.35%), while May robusta contracts gained 82 points (2.31%), reflecting market reactions to geopolitical developments affecting maritime trade.
The rise follows reports that the Strait of Hormuz, a critical global shipping corridor, could face disruption due to the ongoing conflict involving Iran. Statements from Iranian leadership suggested the strategic waterway could be used as leverage, while defense officials in the United Kingdom indicated evidence that mines may be placed in the strait.
The potential closure of the route has pushed up global shipping rates, insurance costs, and fuel expenses, increasing operational costs for coffee importers, traders, and roasters worldwide.
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However, gains in coffee prices remain limited due to favorable weather conditions in Brazil. Forecasts indicate rainfall in major coffee-growing regions, which could support crop development and ease supply concerns.
Adding further pressure on prices, commodity analytics firm StoneX raised its forecast for Brazil’s 2026/27 coffee production to a record 75.3 million bags, compared with its previous estimate of 70.7 million bags.
Meteorological data from Somar Meteorologia also showed that Brazil’s largest arabica-producing region, Minas Gerais, received 14.9 mm of rainfall last week, equivalent to about 35% of the historical average.
Meanwhile, Brazilian export data offered some support to the market. According to Cecafe, Brazil’s green coffee exports fell 27% year-on-year in February, while the country’s Trade Ministry reported a 17.4% annual decline, bringing total shipments to 142,000 metric tons.
Inventory movements are also shaping market sentiment. Stocks of arabica monitored by the Intercontinental Exchange (ICE) recently reached a five-month high of 564,626 bags before easing slightly to 552,192 bags. Robusta inventories also rose to a 3.5-month high earlier this month before declining modestly.
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Earlier in February, coffee prices dropped sharply amid expectations of a strong Brazilian crop. Brazil’s agricultural supply agency Conab projected the country’s 2026 coffee production at 66.2 million bags, including 44.1 million bags of arabica and 22.1 million bags of robusta.
On a global scale, Rabobank estimates coffee production could reach 180 million bags in the 2026/27 season, an increase of roughly 8 million bags compared with the previous year.
Vietnam, the world’s largest robusta producer, continues to influence market dynamics. Government statistics show Vietnam’s coffee exports rose 14% year-on-year in January–February 2026 to 366,000 metric tons, while exports in 2025 climbed 17.5% to 1.58 million metric tons. Production in the 2025/26 season is projected to reach 1.76 million metric tons, the highest level in four years.
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Despite these supply signals, the International Coffee Organization (ICO) reported that global coffee exports for the current marketing year have declined 0.3% year-on-year to 138.658 million bags.
Looking ahead, the USDA’s Foreign Agricultural Service forecasts global coffee production in 2025/26 at 178.848 million bags, with arabica output expected to decline 4.7% and robusta production projected to increase 10.9%. Ending global stocks are expected to fall 5.4% to 20.148 million bags.
Market analysts say the coffee sector remains caught between geopolitical risks affecting trade routes and expectations of strong global production, creating a volatile outlook for prices in the months ahead.
