Coffee Prices See Mixed Performance as El Niño Continues to Prompt Concern for Brazil's Harvest – CoffeeTalk

Coffee prices demonstrated a mixed performance today, with September arabica coffee (KCU26) declining by 10.10 (-3.04%), while September ICE robusta coffee (RMU26) saw a modest increase of 10 (+0.26%). The downturn in arabica coffee prices can be attributed to favorable drier conditions in Brazil’s coffee-growing regions, which have accelerated the harvest pace. Notably, Somar Meteorologia reported no rainfall in Minas Gerais, Brazil’s primary coffee-producing region, for the week ending August 2.

In contrast, tighter near-term supplies are pushing arabica coffee prices upward, as inventories on ICE Arabica have dropped steadily over the past 4.5 months, recently reaching a 2.5-year low. As of July 24, the Cooxupe co-op reported that Brazil’s coffee harvest was only 58.3% complete, lagging behind the previous year’s pace of 67%. Comparatively, a report from Safras & Mercado indicated a completion rate of 64% for Brazil’s 2026/27 coffee harvest by July 15, significantly lower than last year’s 77% and the five-year average of 70%.

Conversely, robusta coffee prices are under pressure due to rising inventories, with ICE robusta stocks peaking at a 4.25-month high of 4,254 lots on July 22, though they have slightly decreased to 4,213 lots today. The bearish sentiment for coffee prices was underscored by the recent USDA biannual forecast, which projected a global coffee output increase of 6.0% in the 2026-27 season, totaling a record 189.7 million bags, largely due to enhanced growing conditions in Brazil. The USDA anticipates a 12% year-on-year rise in global arabica production; however, robusta output is forecasted to decline by 0.7% year-on-year. Ending stocks are expected to rise by 1.9 million bags, reaching a total of 26.3 million bags, while Brazil’s record coffee crop for 2026/27 was anticipated to be 71.9 million bags, reflecting a 14% year-on-year increase.

On the other hand, concerns surrounding the El Niño weather pattern could potentially impact Brazil’s coffee crop adversely in the upcoming year. The impending El Niño has raised fears that it may postpone necessary rains in September and October, crucial for blooming, thereby hurting production for the 2026/27 season. The US Climate Prediction Center has noted that this El Niño, developing across the equatorial Pacific, is expected to be one of the most powerful in 75 years, which could lead to severe weather fluctuations affecting coffee production in both Asia and South America.

In robusta coffee markets, substantial export growth from Vietnam, the largest producer of robusta, has added to the bearish outlook. Vietnam’s National Statistics Office announced a 21.1% year-on-year increase in coffee exports for 2026 (January to July), reaching 1.31 million metric tons. Additionally, projections for Vietnam’s 2025 coffee exports suggest a 17.5% increase to 1.58 million metric tons, with production forecasts for the 2025/26 season climbing to a four-year high of 1.76 million metric tons (approximately 29.4 million bags).

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