**Coffee Prices Decline Amid Supply Increase**
On Thursday, July arabica coffee (KCN26) closed down 2.35% at -5.95, hitting a 19-month low, while July ICE robusta coffee (RMN26) fell 0.56%, down -19. This decline follows forecasts of a record coffee crop in Brazil for 2026/27, predicted to be 71.9 million bags—a 14% year-over-year increase—according to the USDA’s Foreign Agricultural Service.
As coffee supplies improve, analysts predict a 2026 global arabica coffee surplus of 9.5 million bags, up from 7.0 million. Concurrently, Vietnam’s coffee exports increased by 7.9% to 922,000 MT from January to May 2026, further impacting global prices. However, concerns over the potential effects of an El Niño weather pattern could delay crucial rains in Brazil, possibly affecting next year’s crop.
Additionally, ICE arabica coffee inventories have fallen to a 3.75-month low of 426,063, suggesting some supply pressure. The ongoing closure of the Strait of Hormuz is also contributing to rising shipping and import costs, creating a complex backdrop for the coffee market.
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