Shrinking Stockpiles Are Pushing Prices Up
Coffee prices have been on the move, and the numbers behind the surge tell a story that goes well beyond a bad harvest or a drought somewhere. At the center of it all is a straightforward problem: there simply isn't enough coffee sitting in the right warehouses at the right time.
ICE arabica coffee inventories recently dropped to a 2.5-month low, landing at 477,045 bags. At roughly the same time, ICE robusta inventories fell to a 16.75-month low of just 3,687 lots. When stockpiles shrink that fast, traders take notice. July arabica coffee jumped 2.55% in a single session, while July ICE robusta coffee climbed nearly 3%, hitting a two-week high. Those aren't small moves for a commodity market.
Tight inventories are the kind of thing that gets overlooked in casual conversation about coffee prices, but they matter more than almost anything else in the short term. When there's less coffee in cold storage ready to be delivered, buyers scramble, and prices rise to match the anxiety in the room.
A Shipping Bottleneck Nobody Saw Coming
One of the bigger wild cards pushing costs higher is something that has nothing to do with coffee farms at all. The ongoing closure of the Strait of Hormuz has thrown a wrench into global supply chains, and the coffee trade hasn't been spared.
The closure has worked its way through the system in several directions at once. Global shipping rates have gone up. Insurance costs have followed. Fuel and fertilizer prices have climbed. Every one of those increases lands on the desk of coffee importers and roasters, who then have to figure out how much of it they can absorb and how much gets passed along. The end result is a market that feels tighter than the raw production numbers might otherwise suggest.
When a shipping lane that handles a massive portion of global trade gets shut down, there's no quick fix. Rerouting ships adds time and cost. That friction ripples through commodity markets in ways that take months to fully play out.
Vietnam Is Flooding the Market with Robusta
On the other side of the ledger, Vietnam has been exporting coffee at a pace that would have seemed ambitious just a year or two ago. The country is the world's largest robusta producer, and the latest figures from Vietnam's National Statistics Office show that coffee exports from January through April 2026 rose 15.8% compared to the same period the year before, reaching 810,000 metric tons.
That follows an already strong 2025, when Vietnam's full-year coffee exports jumped 17.5% to 1.58 million metric tons. And production is expected to keep climbing. Vietnam's 2025/26 coffee output is projected to hit 1.76 million metric tons — a four-year high and about 6% above the previous year's level.
For robusta specifically, that kind of supply growth is a natural ceiling on price. Even with inventories tightening and shipping costs rising, the market knows that a lot of robusta coffee is on its way. That competing pressure is part of why the picture is so complicated right now.
Brazil's Next Crop Looms Large
Brazil is the largest coffee producer in the world, and what happens there has an outsized effect on global prices. Right now, the forecasts for Brazil's 2026/27 harvest are enormous, and that prospect is hanging over the market like a storm cloud.
The Coffee Trading Academy put Brazil's upcoming harvest at 71.4 million bags, which would represent a 12% increase over the prior year. Marex Group went further, projecting a record crop of 75.9 million bags. Sucafina's forecast came in at 75.4 million bags, a jump of 15.5% year over year. StoneX raised its own estimate to 75.3 million bags, up sharply from its earlier November figure of 70.7 million bags.
Those are staggering numbers. If even the more conservative projections come close to reality, the market is going to be awash in coffee from Brazil within the next harvest cycle. StoneX has gone so far as to project that the global coffee surplus will expand from 1.8 million bags in 2025 to 10 million bags in 2026 — the largest surplus the market has seen in six years. A surplus of that size doesn't just soften prices. It resets expectations for how high prices can realistically go.
Brazil's Current Exports Are a Different Story
Here's where things get interesting. While everyone is watching Brazil's future crop with wide eyes, the country's current export numbers are running in the opposite direction. Brazil's green coffee exports in March fell 10% compared to the same month a year ago, landing at 2.65 million bags, according to Cecafe. Brazil's Trade Ministry reported an even sharper drop, showing March coffee exports down 31% year over year to 151,000 metric tons.
Falling exports from the world's biggest producer tighten near-term supply, which supports prices in the here and now. It's one of those situations where the short-term and long-term signals are pointing in completely different directions. Traders who are focused on what's available today see a reason to buy. Traders who are focused on what's coming six to twelve months from now see a reason to sell.
What the Big Picture Looks Like
The International Coffee Organization reported in November that global coffee exports for the current marketing year, which runs from October through September, slipped 0.3% year over year to 138.658 million bags. A small decline in global exports, combined with shrinking inventories, is the kind of combination that keeps prices from falling off a cliff even when large crops are on the horizon.
The USDA's Foreign Agriculture Service released its own bi-annual assessment in December, projecting that world coffee production in 2025/26 will rise 2% to a record 178.848 million bags. That forecast includes a 4.7% drop in arabica production to 95.515 million bags alongside a 10.9% jump in robusta output to 83.333 million bags. Brazil's 2025/26 production was expected to dip 3.1% to 63 million bags, while Vietnam was forecast to grow its output 6.2% to 30.8 million bags — again, a four-year high.
The USDA also projected that 2025/26 ending stocks will fall 5.4% to 20.148 million bags, down from 21.307 million bags the prior year. Falling ending stocks are one of the clearest signals that supply isn't keeping pace with demand in the current cycle, even if that changes dramatically once Brazil's next record crop hits the market.
The Push and Pull That Defines This Market
What makes the coffee market genuinely difficult to read right now is that nearly every bullish factor has a bearish counterweight sitting right next to it. Inventories are low, but a record Brazilian harvest is coming. Vietnam is exporting aggressively, but the Strait of Hormuz is making shipping more expensive for everyone. Brazil's current exports are down sharply, but its future output is headed toward record territory.
The result is a market that can swing hard in either direction on any given day depending on which set of factors traders decide to focus on. A two-week high in robusta one afternoon can be followed by a wave of selling the next morning once someone runs the numbers on how much coffee Brazil is expected to ship in 2027.
For anyone paying attention to commodity markets, coffee right now is about as active and unpredictable as it gets. The fundamentals are genuinely in conflict, and the geopolitical layer added by the Hormuz closure only makes the calculus harder. The prices people pay for their morning cup are being shaped by forces that stretch from the farms of Minas Gerais to tankers navigating around the Persian Gulf — and the people trading on those signals are doing their best to price in a future that nobody can see with much clarity.
