Coffee prices fell sharply on Thursday, with July arabica down 1.77% and July robusta down 2.35%, hitting one-week lows amid expectations of a bumper crop from Brazil. The Coffee Trading Academy forecasts a 12% year-over-year increase in Brazil’s 2026/27 coffee harvest, potentially reaching 71.4 million bags. This follows multiple upward revisions from industry analysts, indicating a record Brazilian crop that could significantly impact global supply dynamics.
The anticipated increase in Brazilian coffee production, coupled with rising exports from Vietnam, the largest robusta producer, is likely to exert downward pressure on robusta prices. While current arabica supplies are tightening—evidenced by a two-month low in ICE inventories—concerns over geopolitical tensions affecting shipping routes and costs could provide some support for prices.
Market participants should closely monitor these supply forecasts and geopolitical developments, as they could lead to increased volatility in coffee prices, particularly if the expected surpluses materialize against a backdrop of rising production costs.
Source: nasdaq.com