September arabica coffee (KCU26) rose by $18.70 (+5.81%) today, reaching a one-week high, while September ICE robusta coffee (RMU26) increased by $26 (+0.68%). The spike in coffee prices is attributed to a decline in the dollar index to a seven-week low, alongside tightening arabica coffee supplies, with ICE-monitored inventories dropping to a 2.5-year low of 248,897 bags.
On the production front, Brazil’s coffee harvest is lagging, reported at 67.3% completion as of July 31, compared to 74.2% at the same time last year. This slower harvest coupled with concerns over the El Niño weather pattern, which may disrupt the upcoming crop in 2026/27, adds bullish pressure to arabica prices. Meanwhile, robusta coffee is experiencing increased inventory levels, with the ICE inventory reaching 4,206 lots, down from a recent high of 4,254 lots.
Vietnam’s coffee exports have surged, with a 21.1% year-over-year increase for the first half of 2026, totaling 1.31 million metric tons, further complicating the robusta market. The USDA forecasts a potential record global coffee output of 189.7 million bags for the 2026-27 season, with arabica production rising 12% year-on-year, albeit with a projected drop of 0.7% in robusta production.
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