On Tuesday, May arabica coffee (KCK26) closed up 3.96% at +12.15, while May ICE robusta coffee (RMK26) rose 0.69% to +25. The increase in coffee prices is attributed to Brazilian farmers withholding supplies in anticipation of higher prices, combined with tight cash market conditions. Additionally, disruptions in global shipping due to the closure of the Strait of Hormuz have intensified supply issues, raising shipping and insurance costs for coffee importers.
Brazil’s recent rainfall figures show that Minas Gerais, the largest arabica-growing region, received only 45% of its historical average, contributing to concerns about crop yields. Despite this, forecasts for Brazil’s coffee production have been raised significantly, with StoneX estimating a record 75.3 million bags for the 2026/27 season, up from 70.7 million. This comes amid rising global supplies, with Vietnam reporting a 14% year-on-year increase in coffee exports for January-February 2026, totaling 366,000 metric tons.
