On October 3, 2023, September arabica coffee (KCU26) closed down 3.90 points (-1.18%), while September ICE robusta coffee (RMU26) increased by 15 points (+0.39%). Coffee prices have fluctuated significantly since reaching 5.5-month highs last week, largely due to illiquid trading conditions exacerbated by recent increases in margin requirements by the Intercontinental Exchange (ICE).
Concerns are rising about Brazil’s coffee production amid a delayed harvest, with reports indicating that as of July 1, the 2026/27 coffee harvest was only 52% complete, compared to 60% last year. Additionally, the El Niño weather pattern, expected to be one of the strongest in over 75 years, could further disrupt production, leading to potential floods, droughts, and temperature fluctuations impacting coffee farms in Brazil and beyond.
ICE arabica coffee inventories have dropped to a 2.25-year low of 339,652 bags, while robusta inventories reached a 3.5-month high of 4,220 lots. Increased exports from Vietnam, which rose by 7.3% year-on-year in the first half of 2023, are putting downward pressure on robusta prices.
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