Coffee Prices Jump as El Niño Concerns Push Traders to Buy

The coffee futures market rallied sharply on Thursday, with July Arabica climbing 5.10 points (≈ 1.9%) and July Robusta surging 71 points (≈ 2.1%). The rally followed investor concerns that an El Niño event could delay Brazil’s rainy season—critical for the country’s September‑October coffee flowering.

El Niño Outlook

• NOAA predicts an 82 % chance of El Niño between May and July, lasting through year‑end.
• A 67 % chance of a “super” El Niño is also projected.

Coffee Supply Forecasts

These forecasts suggest a ≈ 12 % year‑on‑year increase in Brazil’s output.

Vietnam’s Robust Growth

• January‑April 2026 exports up 15.8 % YoY to 810,000 metric tons.
• Total production projected at a four‑year high of 1.76 million metric tons (≈ 29.4 million bags).

Such gains exert downward pressure on Robusta prices.

Inventory Dynamics

• Robusta: Two‑year low of 3,631 lots last Friday; now a five‑week high.
• Arabica: Dropped to a three‑month low of 451,225 bags on Thursday.
• Brazil exports: April green coffee shipments fell 1.3 % YoY.

External Pressures

• Strait of Hormuz remains closed, inflating shipping and fuel costs for exporters and roasters.
• International Coffee Organization notes a slight decline in global exports this marketing year.
• USDA projects overall coffee production to rise 2 % in 2025/26, but Brazil’s output is expected to fall by 3.1 %.

These intertwined factors shape the current coffee futures landscape, driving price volatility and influencing market expectations.