Arabica coffee futures are currently trading at approximately $4 per pound, hovering near their lowest point in over a week. This decline is largely attributed to the forecasts of ample harvests in key producing countries, especially Brazil. According to Rabobank, a prominent global coffee market analyst, there is an anticipated worldwide coffee market surplus ranging from 7 to 10 million bags by the 2026/27 season. This surplus is primarily driven by a recovery in Arabica production in Brazil. Concurrently, StoneX projects a significant rebound in production the following year, forecasting a record-breaking harvest of 70.7 million bags from Brazil for 2026/27, a 13.5% increase over the previous year. Such a bountiful Brazilian harvest would be instrumental in replenishing stock levels after the persistent supply shortages experienced from 2021 to 2024. In other developments, President Trump has recently enacted an order that removes reciprocal tariffs on a variety of agricultural products that were put in place in April, although Brazilian agricultural exports are still subject to a 40% tariff.
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