Author: Qahwa World |
Date: July 6, 2026
Coffee Prices Surge 16% on Brazil Harvest Delays and Weather Risks
Key Takeaways:
- Arabica prices jumped 16.19% to a 5.5-month high; robusta rose 8.83% to a 5-month high.
- Brazil’s 2026/27 coffee harvest was only 52% complete as of July 1, behind last year’s 60% and the 55% five-year average.
- Rain is forecast for mid-July in Brazil, which could be detrimental to coffee crops.
- ICE arabica inventories fell to a 27-month low of 366,756 bags.
- El Niño concerns are supporting prices, with a 67% chance of a “Super El Niño.”
- USDA forecasts a record Brazil 2026/27 crop of 71.9 million bags (+14% y/y), which remains a bearish factor.
- Vietnam’s coffee exports rose 7.3% in the first half of 2026, pressuring robusta prices.
Coffee prices catapulted higher on Monday, with arabica posting a 5.5-month high and robusta reaching a 5-month high amid a delayed coffee harvest in Brazil. September arabica futures closed up 16.19%, while September robusta futures gained 8.83%.
According to Safras & Mercado, Brazil’s 2026/27 coffee harvest was 52% complete as of July 1, behind last year’s comparable level of 60% and the five-year average of 55%.
Harvest Delay and Rain Forecast Drive Prices Higher
Gains in coffee accelerated on Monday after meteorologist Rural Clima said rain is forecast for a large part of Brazil in the middle of July, which could be “detrimental” to crops, including coffee. Also, Monday’s rally in the Brazilian real to a two-week high against the dollar discourages coffee sales from Brazil’s producers and is supportive for prices.
Coffee prices have moved sharply higher over the past month as heavy rains in Brazil disrupted fieldwork and may have lowered coffee crop quality. Brazilian coffee farmers are also holding back on sales, hoping prices will rise and bracing for the potential impact of this year’s El Niño weather event.
Exchange Inventories at 27-Month Lows
ICE coffee inventories have trended lower over the past three months, supporting coffee prices. ICE arabica coffee inventories fell to a 27-month low of 366,756 bags on Monday. Meanwhile, ICE robusta inventories fell to a two-year low of 3,631 lots on May 15 but have since risen to a three-month high of 4,109 lots last Friday.
| Indicator | Value | Significance |
|---|---|---|
| September Arabica Futures | +16.19% | 5.5-month high |
| September Robusta Futures | +8.83% | 5-month high |
| ICE Arabica Stocks | 366,756 bags | 27-month low |
| Brazil Harvest Completion | 52% | Below last year’s 60% |
| ICE Robusta Stocks | 4,109 lots | 3-month high |
El Niño Concerns Support Prices and Threaten Next Year’s Crop
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 pattern may delay rains in Brazil this September and October, when tree flowering normally occurs, potentially damaging the 2026/27 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 pattern had formed across the equatorial Pacific, setting the stage for months of possible floods, droughts, and temperature fluctuations that could hinder coffee production in Asia and South America.
Bearish Factors: Record Crop Forecasts and Vietnam Exports
Despite recent gains, the broader market remains under pressure from expectations of abundant coffee supplies. 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% from the previous year. Rabobank also increased its forecast for the global arabica surplus in 2026/27 to 9.5 million bags, up from 7 million bags previously.
In Vietnam, the world’s largest robusta producer, coffee exports in the first half of 2026 rose 7.3% year-on-year to 1.05 million metric tons. Vietnam’s 2025 coffee exports jumped 17.5% to 1.58 million metric tons. Vietnam’s 2025/26 coffee production is also expected to increase by 6% year-on-year to 1.76 million metric tons, equivalent to approximately 29.4 million bags.
| Indicator | 2025/26 | Year-on-Year Change |
|---|---|---|
| Global Coffee Production | 178.85 million bags | +2.0% |
| Arabica Production | 95.52 million bags | -4.7% |
| Robusta Production | 83.33 million bags | +10.9% |
| Ending Stocks | 20.15 million bags | -5.4% |
Frequently Asked Questions About the Coffee Price Surge
Q: Why did coffee prices surge 16%?
A: Due to Brazil’s delayed harvest (52% complete vs. 60% last year), rain forecasts for mid-July that could damage crops, and inventories falling to 27-month lows.
Q: How does El Niño affect coffee prices?
A: El Niño could delay flowering rains in Brazil during September-October, potentially damaging the 2026/27 crop and supporting higher prices.
Q: How do Vietnam’s exports influence prices?
A: Rising Vietnamese exports increase robusta supply, which puts downward pressure on prices.
Q: What is the current level of exchange inventories?
A: ICE arabica stocks fell to 366,756 bags (a 27-month low), while robusta stocks rose to 4,109 lots (a 3-month high).
Q: Will prices continue to rise?
A: It depends on weather developments in Brazil, the severity of any crop damage, El Niño developments, and inventory trends.
The coffee market faces heightened uncertainty. While large surplus expectations remain in the background, delayed harvests, weather risks, falling inventories, and El Niño concerns are reshaping the balance. Investors are closely watching weather developments in Brazil and inventory trends to determine the next direction for prices.
Prepared and edited by: Qahwa World – Based on a Barchart report by Rich Asplund (adapted).
All rights reserved. Republication with attribution permitted.
Publication date: July 6, 2026
