Dry Minas Gerais Rain Lifts Coffee, Record Harvest Forecasts Loom

Minas Gerais got just 4.2 mm of rain last week, only 20% of the historical average, and that was enough to snap coffee prices back higher even as the broader market kept whispering about huge crop numbers ahead. For roasters and traders, the message was familiar: a dry spell in Brazil can tighten nerves fast, but it does not erase the weight of a much larger supply story.

The near-term squeeze showed up in both arabica and robusta. Arabica futures gained on the rainfall shortfall, while robusta found extra support from tight nearby inventories. ICE robusta stocks fell to 3,955 lots, a 1.25-year low, a reminder that even in a market obsessed with big harvests, the pipeline can still run thin when weather and logistics turn unfriendly.

That tension is why prices can rally on one dry week and then quickly fade again. StoneX projected a 2026/27 global coffee surplus of 10 million bags, up from 1.8 million bags in 2025, and said world production could hit a record 182.5 million bags. Its wider outlook also pointed to a 166.5 million-bag Brazilian crop in 2025 and an even larger surplus next season, while other market commentary has floated the idea of a 70 million-bag Brazilian harvest. The direction of travel is clear: traders are still trying to price in a major supply recovery, even as the weather refuses to cooperate in the short run.

The export side adds another layer of push and pull. Cecafé said Brazil exported about 8.46 million 60-kilogram bags of coffee in the first quarter of 2026, down 21.2% from a year earlier, while revenue fell 13.6% to about $3.37 billion. March shipments also slipped 7.8% year over year to 3.04 million bags. In Vietnam, by contrast, the National Statistics Office said first-quarter coffee exports rose 14% year over year to 585,000 metric tons, a sign that the global flow of beans is still shifting underfoot.

For coffee businesses, that is where the risk lands on the shelf. A drier Minas Gerais can lift green coffee costs, but the bigger harvest forecasts from Brazil and Vietnam can still pressure later-season pricing. ING said Brazilian supply is expected to recover strongly in 2026/27, though weather remains a risk. Brazil’s instant coffee sector is also still pressing for clarity on a 50% U.S. tariff, another reminder that the next move in coffee may come as much from policy and shipping as from the next rain gauge in Minas Gerais.