Arabica and robusta coffee futures moved higher on Tuesday, extending gains as supply chain disruptions from a key global shipping route offset forecasts for a record harvest in Brazil.
Market Movement and Immediate Catalysts
May arabica coffee (KCK26) closed up 1.90 points, a gain of 0.65%. May ICE robusta coffee (RMK26) settled higher by 52 points, or 1.50%. The arabica contract reached a one-week high during the session.
The primary driver for the price increase is the closure of the Strait of Hormuz, a critical maritime passage. This disruption has increased global shipping rates, insurance premiums, and fuel costs, raising expenses for coffee importers and roasters worldwide. The logistical bottleneck is underpinning prices despite other bearish factors in the market.
Conflicting Supply Signals Weigh on Market
The price rise comes just one day after arabica coffee fell to a two-week low. Abundant rainfall in Brazil’s key growing regions had initially eased concerns about crop stress. Weather monitoring firm Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica-producing area, received 57.7 mm of rain last week. This total represents 139% of the historical average for the period.
Market analysts have recently revised Brazil’s production estimates upward. StoneX raised its forecast for Brazil’s 2026/27 coffee crop to a record 75.3 million bags in a report issued last Thursday. This figure is up significantly from a November estimate of 70.7 million bags.
Export Data and Inventory Pressures
Supporting prices was data showing a decline in Brazilian exports. The country’s green coffee exports fell 27% year-over-year in February to 2.3 million bags, according to Cecafe, the Brazilian Coffee Exporters Council. Brazil’s Trade Ministry separately reported that total coffee exports for the month fell 17.4% year-over-year to 142,000 metric tons.
These factors compete with rising exchange inventories, which typically pressure prices. ICE-monitored arabica coffee inventories climbed to a 5.5-month high of 581,830 bags on Monday. Robust inventories reached a 3.5-month high of 4,721 lots earlier in March but have since moderated to 4,637 lots as of Tuesday.
Long-Term Production Outlook Remains Strong
The broader market context remains focused on ample global supply. Coffee prices sold off sharply in February, with arabica hitting a 16-month low on February 24. Robusta futures tumbled to a 7.25-month low on February 23.
Official Brazilian forecasts project a substantial harvest. Conab, the government’s crop agency, stated on February 5 that Brazil’s 2026 coffee production will climb 17.2% year-over-year to a record 66.2 million bags. The agency expects arabica output to jump 23.2% to 44.1 million bags, with robusta production rising 6.3% to 22.1 million bags.
Other institutions echo this robust global outlook. Rabobank said on March 4 that world coffee production is projected to reach a record 180 million bags in the 2026/27 season. This would represent an increase of approximately 8 million bags from the prior year.
Vietnam’s Expanding Role
Increased exports from Vietnam, the world’s largest robusta producer, add to the global supply. Vietnam’s National Statistics Office reported on March 6 that its coffee exports for January-February 2026 rose 14% year-over-year to 366,000 metric tons. The country’s 2025 coffee exports jumped 17.5% to 1.58 million metric tons.
Vietnam’s 2025/26 coffee production is projected to climb 6% year-over-year to a four-year high of 1.76 million metric tons, equivalent to 29.4 million bags.
Institutional Analysis and Forecasts
The International Coffee Organization (ICO) reported in November that global coffee exports for the current marketing year fell 0.3% year-over-year to 138.658 million bags.
A separate bi-annual report from the USDA’s Foreign Agriculture Service (FAS) on December 18 projected world coffee production in 2025/26 would increase 2.0% to a record 178.848 million bags. The FAS forecast anticipates a 4.7% decrease in arabica production offset by a 10.9% increase in robusta output.
The same report forecasted Brazil’s 2025/26 coffee production would decline 3.1% year-over-year to 63 million bags. It projected Vietnam’s output would rise 6.2% to a four-year high of 30.8 million bags. The FAS also expects 2025/26 ending stocks to fall 5.4% to 20.148 million bags.
What’s Next for Coffee Markets
Traders are now balancing near-term logistical headaches against a fundamentally bearish long-term supply picture. The duration of the shipping disruption will be a key watchpoint. Market attention will also remain fixed on weather patterns in Brazil and harvest progress in Vietnam as the seasons progress. The interplay between these immediate supply chain costs and the anticipated record harvests will likely dictate price direction in the coming weeks.
For official commodity data and reports, visit the Intercontinental Exchange (ICE). Global trade statistics are available from the International Coffee Organization.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
