Arabica coffee experienced its most significant jump in nearly four years, reaching a new high since 2022. This surge is primarily attributed to increasing worries about the supply of Arabica coffee from Brazil, the world's leading producer.
The concerns are exacerbated by heavy rains in Brazil, specifically in Minas Gerais, the country's primary coffee-growing region. Somar Meteorologia reported that rainfall in this area through June 28 was 31.3 mm, an astounding 1,956% of the historical average, significantly delaying the coffee harvest and potentially impacting crop quality. This weather disruption follows a period where Arabica coffee had fallen to a 19-month low in early June, amid forecasts of a bumper crop for 2026/27.
Adding to the supply concerns is the potential impact of an El Niño weather pattern. The US National Oceanic and Atmospheric Administration (NOAA) estimates a 67% probability of a "Super El Niño" this year, which could be the strongest on record. This weather phenomenon is anticipated to cause floods, droughts, and temperature fluctuations in coffee-producing regions later this year, potentially hindering Brazil’s 2026/27 coffee crop by delaying crucial rainfall for tree flowering in September and October. Meanwhile, ICE Arabica coffee inventories have fallen to a 2.25-year low of 380,534 bags, further tightening near-term supplies.
