May arabica coffee (KCK26) on Monday closed up +3.60 (+1.23%), and May ICE robusta coffee (RMK26) closed down -1 (-0.03%).
NY arabica coffee prices on Monday posted a new 3-week high and closed higher. As a bullish factor, Somar Meteorologia reported Monday that Brazil's largest arabica coffee-growing area, Minas Gerais, received 14.9 mm of rain last week, or 35% of the historical average.
Coffee prices have ongoing support from potential supply disruptions, as the war in Iran has halted shipping through the Strait of Hormuz. The closure of the waterway has increased global shipping rates, insurance, and fuel costs, and raises costs for coffee importers and roasters. Also, coffee prices have positive carryover from last Thursday when Brazil's Trade Ministry reported that Brazil's Feb coffee exports fell -17.4% y/y to 142,000 MT.
Coffee prices on Monday were undercut by the mild increase in the dollar.
The recovery in ICE coffee inventories is negative for prices. ICE-monitored arabica inventories fell to a 1.75-year low of 396,513 bags on November 18, but recovered to a 5-month high of 553,379 on Monday. Also, ICE robusta coffee inventories fell to a 14-month low of 4,012 lots on December 10 but recovered to a 3.25-month high of 4,721 lots on March 3.
Coffee prices in February sold off sharply, with arabica falling to a 15-month low on February 24 and robusta tumbling to a 6.75-month low on February 23 as signs of a bumper Brazilian coffee crop supported the global supply outlook. On February 5, Conab, Brazil's crop forecasting agency, said that Brazil's 2026 coffee production will climb by +17.2% y/y to a record 66.2 million bags, with arabica production up +23.2% y/y to 44.1 million bags and robusta production up +6.3% y/y to 22.1 million bags. Meanwhile, Rabobank said on March 4 that global coffee production is projected to reach a record 180 million bags in the 2026/27 season, up by about 8 million bags from a year earlier.
Soaring coffee exports from Vietnam, the world's largest robusta producer, are bearish for robusta prices. Vietnam's National Statistics Office reported on March 6 that its Jan-Feb 2026 coffee exports rose by 14% y/y to 366,000 MT. Vietnam's 2025 coffee exports jumped by +17.5% y/y to 1.58 MMT. Also, Vietnam's 2025/26 coffee production is projected to climb +6% y/y to a 4-year high of 1.76 MMT (29.4 million bags).
As a bearish factor, the International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (Oct-Sep) fell -0.3% y/y to 138.658 million bags.
The USDA's Foreign Agriculture Service (FAS) bi-annual report on December 18 projected that world coffee production in 2025/26 will increase by +2.0% y/y to a record 178.848 million bags, with a -4.7% decrease in arabica production to 95.515 million bags and a +10.9% increase in robusta production to 83.333 million bags. FAS forecasted that Brazil's 2025/26 coffee production will decline by -3.1% y/y to 63 million bags and that Vietnam's 2025/26 coffee output will rise by 6.2% y/y to a 4-year high of 30.8 million bags. FAS forecasts that 2025/26 ending stocks will fall by -5.4% to 20.148 million bags from 21.307 million bags in 2024/25.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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