Coffee prices are experiencing significant declines, with July arabica coffee down 2.10% and robusta coffee down 1.52%, driven by expectations of a record Brazilian coffee harvest. The Marex Group has projected Brazil’s 2026/27 coffee crop could reach 75.9 million bags, while StoneX has also raised its estimates, indicating a substantial global coffee surplus of 10 million bags in 2026, the largest in six years. These forecasts have contributed to the bearish sentiment in the market.
The increase in coffee production from Brazil and robust exports from Vietnam, the largest robusta producer, are exerting downward pressure on prices. However, concerns over potential disruptions in global coffee supplies due to geopolitical tensions in the Strait of Hormuz and recent declines in Brazilian coffee exports may provide some support. The International Coffee Organization has also reported a slight decrease in global coffee exports, adding complexity to the market dynamics.
Traders should closely monitor the evolving supply landscape, particularly the impact of geopolitical factors on shipping costs and coffee availability, as these could influence price movements in the near term.
Source: nasdaq.com