Coffee Prices Rise on Weather Concerns

Coffee prices moved higher on Tuesday, reaching one week highs as weather risks in key producing countries raised concerns about future supply.

July arabica coffee futures closed up 0.61 percent, while July ICE robusta coffee futures gained 1.82 percent.

Robusta prices climbed sharply due to continued dry conditions in Vietnam, the world’s largest robusta producer.

According to weather forecaster Vaisala, recent rainfall in Vietnam’s Central Highlands, the country’s main coffee growing region, has been uneven. Additional rain is needed to support cherry development.

El Niño Risks in Brazil

Concerns over a possible El Niño weather pattern in Brazil also supported prices. Coffee trader Commercial warned that El Niño could delay seasonal rains in Brazil during September and October, the critical flowering period for coffee trees, potentially affecting the country’s 2026/27 crop.

The US National Oceanic and Atmospheric Administration estimates an 82 percent probability that El Niño conditions will develop between May and July and continue through the end of the year, including a 67 percent chance of a Super El Niño.

Despite Tuesday’s gains, coffee prices have generally weakened over the past month as expectations for larger global supplies weighed on the market. Arabica futures fell to a one and a half year low last week following several optimistic crop forecasts for Brazil.

Supply Forecasts and Vietnam Exports

On May 7, the Coffee Trading Academy projected Brazil’s 2026/27 coffee harvest at 71.4 million bags, up 12 percent year on year.

Marex Group forecast a record crop of 75.9 million bags, while StoneX raised its estimate to 75.3 million bags. StoneX also projected the global coffee surplus could expand to 10 million bags in 2026, compared with 1.8 million bags in 2025.

Additional pressure on robusta prices has come from rising exports from Vietnam. On May 9, Vietnam’s National Statistics Office reported that coffee exports during January to April rose 15.8 percent year on year to 810,000 metric tons.

Full year exports for 2025 increased 17.5 percent to 1.58 million metric tons. Vietnam’s 2025/26 coffee production is also expected to rise 6 percent to 1.76 million metric tons, equivalent to 29.4 million bags, the highest level in four years.

Inventories and Other Factors

ICE coffee inventories have generally declined over the past two months, offering some support to prices.

ICE robusta inventories fell to a two year low of 3,631 lots on May 15 before recovering slightly to 3,968 lots last Friday.

ICE arabica inventories dropped to a three and a quarter month low of 446,816 bags on Tuesday.

Brazilian export data also provided support. Cecafe reported on May 12 that Brazil’s April green coffee exports declined 1.3 percent year on year to 2.76 million bags.

Disruptions linked to the closure of the Strait of Hormuz have increased shipping costs, insurance premiums, fertilizer expenses, and fuel prices, tightening global coffee supply chains.

Global Production Outlook

The International Coffee Organization reported that global coffee exports for the current marketing year (October to September) fell 0.3 percent year on year to 138.658 million bags.

The USDA Foreign Agricultural Service projects global coffee production for 2025/26 will rise 2 percent to a record 178.848 million bags.

The report forecasts arabica production declining 4.7 percent to 95.515 million bags, while robusta production increases 10.9 percent to 83.333 million bags. FAS estimates Brazil’s 2025/26 coffee production at 63 million bags, down 3.1 percent, while Vietnam’s output is expected to rise 6.2 percent to a four year high of 30.8 million bags. Global ending stocks for 2025/26 are forecast to decline 5.4 percent to 20.148 million bags.