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Brazil’s bumper coffee harvest was forecast to ease global prices, which hit record highs last year. However, futures prices remain elevated. As Cole Martin reports for Bloomberg, this can partly be put down to low stockpiles at warehouses monitored by the Intercontinental Exchange, which runs the arabica futures market.
Warehouse stockpiles help underpin the global market by ensuring enough coffee is available to fulfill contracts. The past two years of smaller harvests and high prices have depleted those stockpiles to their lowest levels since 1999, and many farmers continue to hold back their coffee, hoping prices climb further.
Analysts told Martin that producers currently have little incentive to deliver their coffee to the exchange, as they can earn more from private buyers. Some Brazilian coffee, Archer Consulting analyst Marcelo Moreira said, is “really getting a premium in some markets.” But once the expected surplus from Brazil and elsewhere arrives, the C price could plummet, causing yet more volatility.
Meanwhile, the Brazilian real has risen against the U.S. dollar in 2026, meaning farmers there earn less on exports and have even less incentive to sell. The outcome of the country’s closely contested presidential election could impact the currency’s strength, and thus affect coffee prices as well. Right-wing senator Flávio Bolsonaro’s better-than-expected showing in the first round on October 4 saw the real jump more than 4% against the dollar.
Read the full story on the coffee surplus conundrum here or via Moneyweb here.
