Coffee prices surged on the day, with September arabica rising sharply to a six-week high as market participants weighed slower harvest progress in Brazil, tighter arabica inventories, and supply disruptions following a powerful earthquake in Colombia. Robusta also climbed, though traders appeared to balance that strength against signs of increasing Vietnamese exports.
Key takeaways
- Arabica jumped with September futures up 11.80 (about 3.49%) to a six-week high.
- Robusta also rose, with September ICE robusta up 95 (about 2.62%), reflecting offsetting bullish and bearish supply signals.
- Harvest pace and inventories drove arabica: Brazil’s crop was behind schedule and ICE arabica inventories fell to a multi-year low.
- Colombia disruption added support: a 7.4 magnitude earthquake prompted concerns despite reports of limited damage to processing facilities.
- Weather risk remains central: traders are watching El Niño-linked forecasts for Brazil’s next flowering and crop development window.
What drove the move
Arabica prices gained traction as multiple supply-related factors aligned in the market. Data cited from Safras & Mercado showed Brazil’s 2026/27 coffee harvest was 90% complete as of August 12, behind 97% last year and the five-year average of 94%. The report also indicated Brazil’s arabica portion was 86% complete, compared with 95% a year earlier.
In addition, inventories tightened. ICE arabica coffee inventories fell to a 2.75-year low of 231,445 bags on Friday, a development traders typically view as supportive when demand remains steady.
Geopolitical and operational risk also played a role. A 7.4 magnitude earthquake struck Colombia on Monday, with the coffee-growing provinces of Caldas and Risaralda affected—together accounting for about a quarter of Colombia’s production. While exporters told Bloomberg that the earthquake did not cause significant damage to milling and processing facilities, the report said exports moved only partially through the Buenaventura port and traffic remained intermittent.
Market reaction: why robusta was firmer but capped
Robusta rose alongside arabica, but the advance looked less one-directional as traders weighed inventory trends and crop conditions against export flow data from Vietnam.
On Friday, ICE robusta inventories climbed to a 5-month high of 4,537 lots, a pattern that can weigh on prices by signaling looser nearby availability. At the same time, Vietnam—dominant producer of robusta—continued to show export momentum. Vietnam’s National Statistics Office reported that 2026 coffee exports for January to July rose 21.1% year over year to 1.31 million metric tons. It also cited growth in 2025 exports, which rose 17.5% year over year to 1.58 million metric tons.
Forecasts for production and processing capacity are also a factor. The report projected Vietnam’s 2025/26 coffee production to rise 6% year over year to 1.76 million metric tons (about 29.4 million bags), which traders often interpret as additional headroom for robusta supply.
Bigger picture: weather, El Niño risk, and USDA outlook
Beyond immediate harvest and inventory updates, the market is focused on forward weather and global supply projections. Below-normal rainfall in Brazil’s main arabica-growing region featured in today’s commentary. Somar Meteorologia reported that 0.6 mm of rain—about 11% of the historical average—fell in the week ended August 16 in Minas Gerais, which could potentially influence crop development depending on the pace of recovery in rainfall.
At the same time, traders are watching El Niño signals. Coffee trader Commercial said the El Niño pattern may delay rains in Brazil during September and October, a period when flowering typically occurs. That concern ties into the U.S. Climate Prediction Center’s earlier assessment that El Niño is likely to be among the strongest in more than 75 years, raising the risk of swings in temperature and rainfall across parts of Asia and South America later in the year.
Adding to the balancing act, the USDA’s latest biannual outlook was described as mixed across arabica and robusta. On July 22, the USDA forecast global coffee output in the 2026–27 season would rise 6.0% to a record 189.7 million bags, citing improved growing conditions in Brazil. It expected global arabica production to rise 12% year over year, while robusta output was projected to fall 0.7%. The USDA also projected world ending stocks to increase by 1.9 million bags to 26.3 million bags.
Separately, the USDA’s Foreign Agricultural Service had forecast a record 2026/27 Brazil crop of 71.9 million bags, up 14% year over year, based on a June 3 assessment.
What to watch next
Traders will likely monitor Brazil weather for signs of rainfall normalization after the reported dry patch and watch how El Niño-driven forecasts evolve around the flowering window. For near-term risk, the key developments are the pace of Colombia exports through Buenaventura and further updates on Brazil harvest completion and inventory trends on ICE. Investors may also look ahead to upcoming USDA and country-by-country production and export updates as new forecasts are digested.
