Coffee prices are experiencing upward momentum, with May arabica coffee (KCK26) rising 0.93% and May ICE robusta coffee (RMK26) increasing 2.95%. This surge follows Iran’s announcement of the closure of the Strait of Hormuz, which has disrupted shipping routes and elevated costs for coffee importers and roasters. Additionally, robusta coffee has seen a price boost as ICE inventories hit a 16-month low, signaling tighter supply conditions.
Despite these bullish signals, expectations of a record Brazilian coffee crop are tempering price increases. Recent projections from Marex Group and StoneX indicate Brazilian production could reach approximately 75 million bags for the 2026/27 season, contributing to a forecasted global surplus of 10 million bags. Meanwhile, Vietnam’s robust coffee exports and rising production further complicate the outlook for robusta prices, with a reported 14% increase in exports year-to-date.
Market participants should closely monitor supply dynamics, particularly the impact of geopolitical tensions and weather patterns in Brazil, as these factors will influence pricing trends in the coming months.
Source: nasdaq.com