Coffee Prices Jump as El Niño Concerns Push Traders to Buy

The market for coffee futures saw a sharp rise on Thursday, with July arabica climbing 5. 10 points (about 1. 9%) and July robusta gaining 71 points (around 2. 1%). The surge came as investors reacted to fears that an El Niño event could delay Brazil’s rainy season, a key factor for the country’s coffee flowering in September and October. The United States National Oceanic and Atmospheric Administration warned of an 82 % chance that El Niño will appear between May and July and stay until year‑end, including a 67 % chance of a “super” El Niño. Coffee prices had slipped for several weeks, reaching a 1. 5‑year low on Tuesday. Analysts from the Coffee Trading Academy and Marex Group had earlier projected a record harvest for Brazil in 2026/27, with estimates ranging from 71. 4 to 75. 9 million bags—about a 12 % increase year‑on‑year. StoneX also lifted its forecast to 75. 3 million bags, while the global surplus was expected to grow to 10 million bags in 2026.Meanwhile, Vietnam’s robusta output and exports are rising. The country’s January‑April 2026 export volume climbed 15. 8 % year‑on‑year to 810, 000 metric tons, and its overall production is projected to hit a four‑year high of 1. 76 million metric tons (29. 4 million bags). These developments tend to put downward pressure on robusta prices. On the supply side, inventories at ICE have been falling. Robusta stocks hit a two‑year low of 3, 631 lots last Friday before easing to a five‑week high. Arabica inventories dropped to a three‑month low of 451, 225 bags on Thursday. Smaller Brazil exports also support prices; April green coffee shipments fell by 1. 3 % year‑on‑year. External factors add to the mix. The Strait of Hormuz remains closed, pushing up shipping and fuel costs for coffee exporters and roasters alike. The International Coffee Organization noted a slight decline in global exports this marketing year, while the USDA’s latest report projects overall coffee production to rise by 2 % in 2025/26, though Brazil’s output is expected to fall by 3. 1 %.