Coffee prices took a significant hit on Friday, with July arabica coffee falling 3.19% to a nine-month low and July robusta coffee down 3.50% to a one-week low. The decline is largely attributed to a weaker Brazilian real, which fell to a five-week low against the dollar, encouraging increased export sales from Brazil’s coffee producers. Additionally, projections of a larger Brazilian coffee crop, with estimates reaching up to 75.9 million bags for the 2026/27 harvest, are further pressuring prices.
The anticipated surplus in global coffee production, projected to expand to 10 million bags in 2026, adds to the bearish outlook. Compounding these factors, robusta coffee inventories have reached a two-year low, while arabica inventories are at a 2.5-month low. However, disruptions in global supply chains, such as the ongoing closure of the Strait of Hormuz, are raising shipping costs and could provide some support for prices.
Market professionals should closely monitor Brazil’s production forecasts and global supply chain developments, as these factors will likely dictate coffee price movements in the near term.
Source: nasdaq.com