On Thursday, May arabica coffee (KCK26) closed up by +4.50 (+1.57%), while May ICE robusta coffee (RMK26) rose by +72 (+2.03%). The increase in prices comes amid escalating tensions due to the Iran war, which has closed the Strait of Hormuz, significantly disrupting global shipping. Prices surged as shipping rates and insurance costs rose, impacting coffee importers.
Favorable weather conditions in Brazil could temper further price increases, as forecasts indicate rain in key coffee-growing areas. Additionally, StoneX raised Brazil’s 2026/27 coffee production estimate to a record 75.3 million bags, an increase from 70.7 million bags. However, Brazil’s February coffee exports saw a decline of 17.4% year-over-year, totaling 142,000 MT, while ICE arabica inventories hit a five-month high of 564,626 bags.
Meanwhile, rising exports from Vietnam, the world’s largest robusta producer, are contributing to bearish trends, with a reported 14% year-over-year increase in January-February exports to 366,000 MT. Overall, global coffee production is projected to reach a record 180 million bags in the 2026/27 season, suggesting a shift in market dynamics.
