Coffee prices are experiencing upward momentum, with July arabica coffee (KCN26) rising by 0.23% amid escalating tensions in the US-Iran conflict, which threaten to disrupt global supply routes through the Strait of Hormuz. This geopolitical uncertainty is driving up shipping and insurance costs, impacting coffee importers and roasters. However, forecasts of a record Brazilian coffee crop for the 2026/27 season could exert downward pressure on prices, as Brazil’s production is projected to increase significantly.
While robusta coffee prices are also influenced by these geopolitical factors, soaring exports from Vietnam, the largest robusta producer, are contributing to bearish sentiment in that segment. Vietnam’s coffee exports have surged by nearly 16% year-over-year, further complicating the price landscape. Conversely, tighter arabica supplies, highlighted by declining ICE inventories, are providing some support for arabica prices.
Market professionals should monitor the interplay between geopolitical tensions and supply forecasts, as these factors will be critical in shaping coffee price trajectories in the near term.
Source: nasdaq.com