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May arabica coffee (KCK26) on Friday closed down by -6.75 (-2.31%), and May ICE robusta coffee (RMK26) closed down -170 (-4.69%).
Coffee prices fell sharply on Friday, with arabica falling to a 1-week low and May robusta dropping to a contract low. The outlook for a bumper Brazil coffee crop is weighing on prices after StoneX raised its Brazil 2026/27 coffee production estimate on Thursday to a record 75.3 million bags, up from its November estimate of 70.7 million bags. Also, Friday’s rally in the dollar index ($DXY) to a 3.5-month high is bearish for coffee prices.
On the positive side for coffee, the closure of the Strait of Hormuz has disrupted global shipping. The closure of the waterway has increased global shipping rates, insurance, and fuel costs, and raises costs for coffee importers and roasters.
In supportive news, Somar Meteorologia reported on Monday that Brazil’s largest arabica coffee-growing area, Minas Gerais, received 14.9 mm of rain last week, or 35% of the historical average.
Coffee prices also saw support from last Tuesday’s news that Brazil’s green coffee exports in February fell by -27% y/y, according to Cecafe. Meanwhile, Brazil’s Trade Ministry reported last Thursday that Brazil’s Feb coffee exports fell -17.4% y/y to 142,000 MT.
Rising ICE inventories also pressure coffee prices. ICE-monitored arabica inventories rose to a 5.5-month high of 572,004 bags on Friday. ICE robusta coffee inventories posted a 3.5-month high of 4,721 lots on March 3 but have since fallen back to 4,517 lots as of Friday.
Coffee prices in February sold off sharply, with arabica falling to a 15.75-month low on February 24 and robusta tumbling to a 7-month low on February 23 as signs of a bumper Brazilian coffee crop supported the global supply outlook. On February 5, Conab, Brazil’s crop forecasting agency, said that Brazil’s 2026 coffee production will climb by +17.2% y/y to a record 66.2 million bags, with arabica production up +23.2% y/y to 44.1 million bags and robusta production up +6.3% y/y to 22.1 million bags. Meanwhile, Rabobank said on March 4 that global coffee production is projected to reach a record 180 million bags in the 2026/27 season, up by about 8 million bags from a year earlier.
Soaring coffee exports from Vietnam, the world’s largest robusta producer, are bearish for robusta prices. Vietnam’s National Statistics Office reported on March 6 that its Jan-Feb 2026 coffee exports rose by 14% y/y to 366,000 MT. Vietnam’s 2025 coffee exports jumped by +17.5% y/y to 1.58 MMT. Also, Vietnam’s 2025/26 coffee production is projected to climb +6% y/y to a 4-year high of 1.76 MMT (29.4 million bags).
As a bearish factor, the International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (Oct-Sep) fell -0.3% y/y to 138.658 million bags.
The USDA’s Foreign Agriculture Service (FAS) bi-annual report on December 18 projected that world coffee production in 2025/26 will increase by +2.0% y/y to a record 178.848 million bags, with a -4.7% decrease in arabica production to 95.515 million bags and a +10.9% increase in robusta production to 83.333 million bags. FAS forecasted that Brazil’s 2025/26 coffee production will decline by -3.1% y/y to 63 million bags and that Vietnam’s 2025/26 coffee output will rise by 6.2% y/y to a 4-year high of 30.8 million bags. FAS forecasts that 2025/26 ending stocks will fall by -5.4% to 20.148 million bags from 21.307 million bags in 2024/25.
