The International Coffee Organization reported a 10% decline in average coffee prices for February amid an improving supply outlook. Forecasts of a record Brazilian crop contributed to the fall, though a blockade in the Strait of Hormuz introduces market uncertainty.
The International Coffee Organization (ICO) published its latest report indicating that coffee prices dropped 10% in February. This monthly average decline occurred as supply prospects strengthened, according to ICO data released on 17 March in London, UK. Recent forecasts of a bumper 2025/26 crop in Brazil have pressured prices downward. StoneX predicts a record harvest of 75.3 million bags, representing a 20.8% increase over the previous year. Favourable weather conditions in key growing regions have supported these expectations. Industry analysts at the annual NCA convention discussed potential price swings this year. Some foresee arabica futures falling to as low as US$1.80/lb by year-end, drawing comparisons to cocoa's 70% drop after surpassing US$12,000/tonne in December 2024. Robusta futures also hit a seven-month low on 18 March in London, with traders anticipating strong Brazilian output starting next month. Countering these downward pressures, geopolitical tensions are creating headwinds. Conflict escalation in the Middle East has led to the Strait of Hormuz remaining effectively closed, disrupting global shipping routes. This has caused gas and oil prices to rise sharply, with Brent crude reaching US$116 per barrel on 19 March—nearing its highest since late February—and potentially climbing to US$200 per barrel without resolution. Higher logistics, shipping, and energy costs threaten the coffee sector's stability.