Coffee Sees Price Hike After Heavy Rains Delay Brazil Harvests – CoffeeTalk

Coffee prices have shown significant increases today, with September arabica coffee (KCU26) rising 3.06% (+9.60) and September ICE robusta coffee (RMU26) up 0.88% (+33). The surge in prices is attributed to worries over heavy rainfall in Brazil, which could further disrupt coffee harvests and tighten global supplies. Notably, Somar Meteorologia reported a staggering 32.4 mm of rain (2700% of historical average) falling in Minas Gerais, Brazil’s largest coffee region, for the week ending July 26.

This rise follows a recent decline in prices to three-week lows after the USDA projected a 6% increase in global coffee output for the 2026-27 season, estimating it could reach a record 189.7 million bags. The forecast included a 12% year-on-year rise in global arabica production but predicted a slight 0.7% decrease in robusta output. Consequently, world ending stocks are anticipated to increase by 1.9 million bags to 26.3 million bags. Additionally, the USDA’s Foreign Agricultural Service forecasted that Brazil’s coffee crop for 2026/27 would reach a record 71.9 million bags, up 14% year-on-year.

Support for rising coffee prices is also buoyed by the slow pace of the coffee harvest in Brazil, with reports indicating that as of July 17, completion rates among Cooxupe co-op members were at 47.3%, lower than the 59% completion rate from the previous year. Moreover, Safras & Mercado noted that as of July 15, Brazil’s coffee harvest was 64% complete, trailing last year’s 77% and the five-year average of 70%.

Contrastingly, rising inventories have been a bearish factor for robusta coffee, with ICE robusta inventories climbing to a four-and-a-half-month high of 4,254 lots before slightly decreasing to 4,200 lots on Friday. In contrast, ICE arabica coffee inventories dwindled to a 2.5-year low of 311,317 bags last Friday, adding a bullish dimension for arabica prices.

Additional concerns have arisen regarding the potential impact of the El Niño weather pattern on Brazil’s coffee crop for next year. Analysts suggest that this weather condition may hinder rainfall in Brazil during critical tree flowering months of September and October, adversely affecting the 2026/27 coffee crop. The US Climate Prediction Center has indicated that the current El Niño is projected to be one of the most intense in over 75 years, which may bring various weather challenges, including floods, droughts, and temperature fluctuations that could impede coffee production in both Asia and South America.

Vietnam, the largest global producer of robusta coffee, is also experiencing a bullish trend in its coffee exports. Reportedly, Vietnam’s 2026 coffee exports for the first half of the year have increased by 7.3% year-on-year to 1.05 million metric tons, and projections for 2025 indicated a more substantial jump of 17.5% to 1.58 million metric tons. The country’s coffee production for the 2025/26 season is anticipated to reach a four-year high of 1.76 million metric tons, representing a 6% increase year-on-year.

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