Arabica Coffee Futures at Over 1-Week Low

Arabica coffee futures traded around $3.10 per pound, near the lowest since early August, as drier conditions in Brazil supported the final stages of the harvest, raising near-term supply prospects. This is particularly important as ICE arabica inventories remain tight, currently at a 2.75-year low of 236,430 bags. Meanwhile, Cecafé data showed that the country shipped 3.03 million 60-kg bags of coffee in July, the first month of the 2026/27 crop year, up 9.9% from a year earlier. Attention remains focused on weather conditions amid concerns over Brazil’s 2027 crop, with the effects of El Niño posing potential risks to crop development. Elsewhere, Colombia, the world’s second-largest producer of Arabica coffee, has partially resumed coffee exports through Buenaventura, its main coffee-export port, although traffic remains intermittent and limited. Exporters said the earthquake caused no significant damage to coffee processing or milling facilities.

Arabica coffee futures have fluctuated in recent weeks, before consolidating below $3.10 per pound to their lowest level in a month. Still, the market continued to be supported by tight supplies, uncertainty over the quality of Brazil's harvest, coffee growers' reluctance to sell, and weather-related risks associated with El Niño. Although a record Brazilian harvest of more than 70 million bags is expected this season, the balance between supply and demand remains tight, particularly in the higher-quality. Traders remain concerned that rains in key producing regions, including Minas Gerais and São Paulo, during June and July, may have affected the quality of part of the crop. ICE arabica coffee fell to a 2.5-year low of 251,417 bags as of August 7, down sharply from the 754,516 bags last year. At the same time, Brazilian producers continue to sell gradually, limiting immediate coffee availability. Meanwhile, the developing "super" El Niño remains a key risk to next year's harvest.

Arabica coffee futures fluctuated around $3.3 per pound, remaining close to their highest since January. Unusually heavy rainfall has delayed harvesting in Minas Gerais, Brazil's largest coffee-growing region, slowing the flow of beans to the market and raising concerns about crop quality. Supporting prices further, ICE-certified arabica inventories have dropped to their lowest level in around two-and-a-half years, highlighting tight available supplies. Still, bearish factors remain. The USDA expects global coffee production to reach a record high in the 2026/27 season, driven by a significantly larger Brazilian arabica crop, while robust exports from Vietnam continue to ease pressure on the robusta market. Traders are also closely watching the developing El Niño, which could threaten flowering and next year's harvest, keeping weather-related risk premiums firmly in place.