Why Are Coffee Prices Going Up? A Look at Supply and Shipping Disruptions

Coffee prices are climbing across major markets today, with May arabica futures gaining +1.42% and May robusta contracts surging +4.39% to reach a 2-week high. This upward movement reflects a complex interplay of supply-side pressures and logistical challenges that are reshaping the global coffee market. Understanding what’s driving coffee prices higher requires examining both immediate disruptions and longer-term production forecasts.

Geopolitical Tensions Shake Global Supply Chains

The primary factor supporting coffee prices right now stems from Middle Eastern tensions. The ongoing conflict in Iran has severely disrupted shipping traffic through the Strait of Hormuz, one of the world’s most critical maritime chokepoints. This disruption carries significant consequences for the coffee trade: increased global shipping rates, elevated insurance premiums, and higher fuel costs are all filtering down to coffee importers and roasters worldwide. These added expenses directly raise the cost structure for bringing coffee from origin countries to consumer markets.

However, not all supply-side factors are working in the same direction. Brazil, the world’s dominant arabica producer, recently received beneficial rainfall that has improved crop prospects. Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica-growing region, received 78 mm of rainfall in the week ending February 20—representing 131% of the historical average. This weather development is tempering gains in arabica coffee prices compared to the sharper rally in robusta.

Brazil and Vietnam: Conflicting Signals for Coffee Market

Recent production forecasts are creating mixed signals for coffee prices going forward. Brazil’s crop forecasting agency, Conab, announced on February 5 that the country’s 2026 coffee production is expected to climb by 17.2% year-over-year to a record 66.2 million bags. Within this total, arabica production is projected to surge 23.2% year-over-year to 44.1 million bags, while robusta output will rise 6.3% year-over-year to 22.1 million bags.

Global production figures paint an even larger picture of supply expansion. Rabobank projected that worldwide coffee production will reach a record 180 million bags in the 2026/27 season, representing approximately 8 million bags more than the prior year. Meanwhile, Vietnam—the world’s largest robusta producer—continues to ramp up exports. Vietnam’s National Statistics Office reported that January coffee exports jumped 38.3% year-over-year to 198,000 metric tons, while the country’s full-year 2025 coffee exports climbed 17.5% year-over-year to 1.58 million metric tons. For 2025/26, Vietnam’s coffee production is projected to reach 1.76 million metric tons (29.4 million bags), representing a 6% year-over-year increase and a 4-year high.

Colombia, the world’s second-largest arabica producer, is sending different market signals. The National Federation of Coffee Growers reported that January coffee production fell 34% year-over-year to just 893,000 bags—a significant contraction that supports coffee prices by tightening arabica supplies in that key origin.

Record Production Forecasts vs. Tightening Inventories

The USDA’s Foreign Agriculture Service (FAS) provided a comprehensive global outlook on December 18, projecting that world coffee production in 2025/26 will increase 2.0% year-over-year to a record 178.848 million bags. However, this masks diverging trends between the two main coffee types: arabica production is expected to decline 4.7% year-over-year to 95.515 million bags, while robusta output will jump 10.9% to 83.333 million bags. The FAS also forecasted that Brazil’s 2025/26 production will retreat 3.1% year-over-year to 63 million bags, while Vietnam’s output will advance 6.2% to a 4-year high of 30.8 million bags.

ICE warehouse inventories present a more complex picture for coffee prices. Arabica inventories tumbled to a 1.75-year low of 396,513 bags on November 18 but have since recovered to 466,055 bags as of last Thursday—still a relatively tight level that can support prices during supply disruptions. Robusta inventories similarly fell to a 14-month low of 4,012 lots on December 10, then rebounded to 4,662 lots on January 26. While this inventory recovery could eventually place downward pressure on coffee prices, current tight conditions remain supportive in the near term.

The International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (October-September) declined 0.3% year-over-year to 138.658 million bags, indicating slower trade flows. Additionally, FAS projects that 2025/26 ending stocks will contract 5.4% to 20.148 million bags from 21.307 million bags in 2024/25, suggesting persistent tightness in the supply-demand balance.

What’s Next for Coffee Prices?

The trajectory of coffee prices will depend on competing forces in the months ahead. Supply-side constraints from shipping disruptions and Colombian production weakness are providing immediate support. However, the massive production expansion forecasted in Brazil and Vietnam, combined with recovering ICE inventories, represents a headwind that could eventually pressure coffee prices lower. For now, the shipping crisis and geopolitical tensions are winning the battle, but the market’s medium-term outlook depends heavily on whether these new production forecasts materialize as expected.