**Coffee Prices Decline Amid Supply Dynamics and Global Shipping Concerns**
On Wednesday, May arabica coffee (KCK26) closed down by 1.75 cents (-0.55%) while May ICE robusta coffee (RMK26) fell by 33 cents (-0.90%). This drop follows a period of long liquidation in futures amidst optimism regarding US-Iran diplomatic efforts that could potentially reopen the Strait of Hormuz, significantly affecting global shipping.
Recent reports indicate that despite a 7-week high for arabica prices earlier this week, Brazilian coffee farmers are withholding supplies to achieve better prices. Managing supply tightness, Brazil’s February coffee exports reportedly decreased by 27% year-over-year to 2.3 million bags, compounded by adverse weather conditions, with only 14.1 mm of rain last week in Minas Gerais, or 45% of the historical average. Furthermore, current global coffee production forecasts are bullish, with StoneX projecting Brazil’s 2026/27 coffee output to reach a record 75.3 million bags, exacerbating bearish sentiment in coffee markets.
