Arabica Coffee Futures at 2-Week Low

Arabica coffee futures eased toward $2.80 per pound, the lowest since late February, pressured by new forecasts of robust supply in top producer Brazil. Recent estimates suggest Brazil’s 2026 coffee harvest could reach 66–70 million bags, potentially reversing a deficit cycle amid improved weather conditions. The Brazilian Institute of Geography and Statistics (IBGE) said that the coffee crop this year is estimated at a record 64.1 million 60-kg bags, up 3.9% from its January forecast. This would mark an 11.5% increase from last year, driven by Arabica beans. StoneX also raised its Brazil 2026/27 coffee production estimate to a record 75.3 million bags, up from its November forecast of 70.7 million bags, representing a 20.8% increase from the previous season, also driven by Arabica output. Meanwhile, the market remains attentive to geopolitical risks, particularly the Iranian conflict, which continues to push up global logistics costs.

Arabica coffee futures traded around $2.96 per pound, close to the highest since mid-February, as traders weighed factors that could affect supply, including logistical risks from the Middle East crisis and a drop in Brazilian exports. The closure of the Strait of Hormuz has increased global shipping rates, insurance, and fuel costs, and raises costs for coffee importers and roasters. In the meantime, data released by the Secretariat of Foreign Trade (Secex) indicated a reduction in Brazilian coffee shipments in February compared to the same period last year, a scenario that could temporarily restrict the availability of the product in the international market. Meanwhile, the market continues to monitor production prospects in the coming cycles. Conab recently projected a record 66.2 million-bag 2026/27 harvest, while expectations have grown that 2027/28 output could exceed 80 million bags, provided there are no frosts or droughts.

Arabica coffee futures traded slightly above $2.80 per pound, staying near their lowest level since July 2025, as the supply outlook continued to be shaped by Brazil’s robust production outlook for the upcoming seasons. Recent favorable weather has supported the 2026/27 Brazilian coffee crop, as substantial rainfall has aided Arabica production areas. Brazil’s crop forecasting agency, Conab, recently projected a record-breaking 2026/27 harvest of 66.2 million bags. Moreover, the market is anticipating the potential for record production in 2027/28, which could exceed 80 million bags, provided there are no adverse weather events such as frosts next winter or new periods of drought between September 2026 and February 2027. Adding further pressure, ICE arabica stocks rose for the third session to 528,028 bags by March 4. Meanwhile, the market is watching the Iranian conflict, as rising oil prices push up global logistics costs and pressure maritime freight for Brazil’s exports.