September arabica coffee (KCU26) closed up +4.10 (+1.14%) on Thursday, and September ICE robusta coffee (RMU26) closed down -16 (-0.43%).
Coffee prices settled mixed on Thursday. Arabica coffee closed higher as it consolidated below Wednesday’s 6.5-month high, and robusta is under pressure from rising inventories as ICE robusta inventories climbed to a 5.25-month high of 4,622 lots on Tuesday.
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Gains in arabica were limited as drier weather in Brazil has allowed for the pace of the country’s coffee harvest to accelerate. Brazil’s Cooxupe co-op reported on Wednesday that 81.1% of the harvest was complete as of Aug 14, up 7 points from the prior week but still down slightly from 86.1% a year earlier.
Below-normal rainfall in Brazil should speed up the pace of the country’s coffee harvest, a bearish factor for prices. Somar Meteorologia reported on Monday that 0.6 mm of rain, or 11% of the historical average, fell in the week ended August 16 in Brazil’s Minas Gerais, the country’s main arabica-coffee growing region.
On Wednesday, arabica prices surged to a 6.5-month high as the slow pace of Brazil’s coffee harvest is limiting coffee supplies. Safras & Mercado reported last Friday that the Brazil 2026/27 coffee harvest was 90% completed as of August 12, behind 97% last year and the 5-year average of 94%. Brazil’s arabica coffee harvest was 86% complete, behind last year’s 95%.
Falling inventories are bullish for arabica coffee prices, as ICE arabica coffee inventories fell to a 2.75-year low of 229,214 bags on Tuesday. By contrast, rising inventories are bearish for robusta coffee as ICE robusta inventories climbed to a 5.25-month high of 4,622 lots on Tuesday.
Coffee prices also have support from last Monday’s devastating earthquake in Colombia, the world’s second-largest producer of arabica beans. Among the areas hit by Monday’s 7.4 magnitude quake were the coffee-growing provinces of Caldas and Risaralda, which account for about a quarter of Colombia’s production.
Colombia has partially resumed coffee exports through the Buenaventura port, which handles most of Colombia’s coffee exports, according to a Bloomberg report last Thursday quoting the head of Colombia’s coffee exporters association, Asoexport. Yet, traffic through the port remains intermittent and limited. The report said the earthquake caused no significant damage to coffee processing and milling facilities, according to exporters.
Concerns that an El Niño weather pattern could hurt Brazil’s coffee crop next year are bullish for prices. Coffee trader Commercial said the El Niño weather pattern may delay rains in Brazil this September and October, when tree flowering normally occurs, hurting Brazil’s 2026/27 coffee crop. On July 8, the US Climate Prediction Center said the El Niño weather pattern that emerged across the equatorial Pacific last month will likely be one of the strongest in more than 75 years. This sets the stage for months of possible floods, droughts, and temperature fluctuations later this year that could hinder coffee production in Asia and South America.
Soaring coffee exports from Vietnam, the world’s largest robusta producer, are bearish for robusta prices. On August 2, Vietnam’s National Statistics Office reported that Vietnam’s 2026 coffee exports (Jan-Jul) rose by +21.1% y/y to 1.31 MMT. Vietnam’s 2025 coffee exports jumped by +17.5% y/y to 1.58 MMT. Also, Vietnam’s 2025/26 coffee production is projected to climb +6% y/y to a 4-year high of 1.76 MMT (29.4 million bags).
The latest USDA biannual forecast was bearish for coffee prices. On July 22, the USDA forecast that global coffee output in the 2026-27 season will rise by +6.0% (10.8 million bags) to a record 189.7 million bags, mainly due to improved growing conditions in Brazil. The USDA expects global arabica production to rise +12% y/y, although robusta production is expected to fall by -0.7% y/y. World ending stocks are expected to rise +1.9 million bags to 26.3 million bags. On June 3, the USDA’s Foreign Agricultural Service (FAS) forecast a record 2026/27 Brazil coffee crop of 71.9 million bags, up +14% y/y.
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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