Arabica Coffee Hits 6.75-Month High as Brazil Harvest Delays and Tight Inventories Fuel Rally
Arabica coffee futures surged to their highest level in nearly seven months, propelled by a slower-than-usual Brazilian harvest and shrinking inventories. December arabica coffee rose 4.62% to settle sharply higher, while September ICE robusta futures also gained 2.64%, according to market data. The rally comes as traders weigh a tight near-term supply picture against expectations of a robust global output rebound.
Brazil's Harvest Lags Behind Pace, Tightening Supplies
A key driver of the price advance is the delayed pace of Brazil's 2026/27 coffee harvest, which is running well behind last year's schedule and the five-year average. According to Safras & Mercado, the country's coffee harvest was 90% complete as of August 12, compared to 97% at the same time last year. The arabica harvest, in particular, was 86% complete, a significant lag from the 95% completed in the previous year.
Adding to the supply concerns, Brazil's Cooxupe co-op, one of the country's largest coffee cooperatives, reported that its harvest was 81.1% complete as of August 14. While this marked a seven-point increase from the previous week, it remained below the 86.1% completion rate recorded a year earlier.
This slower harvest pace is straining an already-tight supply chain. ICE arabica coffee inventories have been declining steadily, reaching a 2.75-year low of 227,992 bags last week, according to reports. One market analysis noted that ICE inventories had fallen to 229,214 bags, describing the level as a 'deficit' that serves as a floor beneath coffee prices. In contrast, robusta inventories have been on the rise, climbing to an 8.75-month high, which has been seen as a bearish signal for that variety.
Colombia's Recovery and Weather Risks Add to Support
Beyond Brazil, supply concerns are also emanating from Colombia, the world's second-largest producer of arabica beans. A powerful 7.4-magnitude earthquake struck the country's coffee-growing provinces of Caldas and Risaralda, which together account for about a quarter of Colombia's production. While exporters reported no significant damage to processing facilities, the disruption has been enough to fuel market jitters.
Colombia has partially resumed coffee exports through the key port of Buenaventura, according to a Bloomberg report quoting the head of the country's coffee exporters association, Asoexport. However, traffic through the port remains intermittent and limited, according to the report, keeping the market on edge.
Weather patterns are also in focus, with concerns that El Niño could bring drier conditions to key growing regions. The US Climate Prediction Center has warned that the El Niño pattern, which emerged last month, could be one of the strongest in over 75 years, a view echoed by the World Meteorological Organization. Commodity trader Commercial noted that El Niño may delay the arrival of rains in Brazil until September or October, potentially harming the 2026/27 crop. In the week ended August 16, the key growing region of Minas Gerais received just 0.6 mm of rain, a mere 11% of its historical average, according to Somar Meteorologia.
Global Output Set to Rebound, But Stocks Remain Thin
Looking ahead, the supply picture is expected to become less constrained. The US Department of Agriculture (USDA) forecast in July that global coffee output for the 2026/27 season will rise by 6% to a record 189.7 million bags. This growth is expected to be driven by a 12% surge in arabica production, particularly from Brazil, where the USDA's Foreign Agricultural Service projected a record crop of 71.9 million bags, a 14% increase year-over-year. As a result, the USDA expects global ending stocks to build by 1.9 million bags to 26.3 million.
However, the market's immediate focus remains on the near-term scarcity. Technical analysts point to a bullish flag formation on the arabica charts, which emerged in December 2024. Prices are currently testing the upper trendline of this pattern; a decisive break above the resistance level of $3.55 could open a path toward the $4.00 psychological level, according to technical analysis. The relative strength index (RSI) was recently at 57.68, suggesting there is still room to run before the market becomes overbought.
In Vietnam, the world's second-largest producer, exports have been robust, with the country shipping 1.31 million metric tons in the first seven months of 2026, a 21.1% increase year-on-year. Output is also projected to rise, with production expectations up 6% for the coming season. These factors could help ease global supply pressures in the medium term, but for now, the market remains squarely focused on the tightness at hand.