Coffee prices took a notable dip on Friday, with July arabica closing down 3.15% and robusta down 2.19%. This decline comes as updated weather forecasts predict dry conditions in Brazil’s coffee-growing regions, allowing the resumption of harvests that had been delayed by heavy rains. Over the past month, arabica has fallen to a 1.5-year low, driven by an improved global supply outlook and projections of a record Brazilian coffee crop for 2026/27.
The implications for the coffee market are significant. With Brazil’s harvest expected to increase by up to 15.5% year-over-year, and Vietnam’s robusta exports rising sharply, the global coffee surplus is projected to expand to 10 million bags. This surplus, coupled with lower ICE coffee inventories, creates a complex landscape for traders. Additionally, concerns about El Niño’s potential impact on future crops add a layer of uncertainty to price movements.
Market professionals should closely monitor these developments, as the interplay of supply increases and weather-related risks could lead to volatility in coffee prices. The ongoing closure of the Strait of Hormuz further complicates supply dynamics, potentially impacting costs and availability for importers and roasters.
Source: nasdaq.com