Coffee Futures Firm on Red Sea Risks; Expana Still Sees Surplus Ahead

Just when global coffee prices were sliding steadily, the recent regional war in the Middle East has added a potential supply chain bottleneck and created more uncertainty in the market. Despite initial firmness in coffee futures seen on March 2, Expana’s fundamentals team is of the opinion that longer-term prices should not be affected. 

“Coffee [in producing regions] is there,” said Expana’s Oliver Broster, Coffee Analyst, who noted that current prices will revolve around the supply chain situation for the time being. 

Six months ago, coffee prices were set to fall as the harvest in Brazil had begun. Yet along came US 50% tariffs on Brazil— forcing a restructuring of the supply chain during a time when certified stocks in consuming nations were low… The futures price jumped. 

“Good quantities of the 2025/26 crop remain in Brazil, northern hemisphere crops are reaching their peak flow, and shipments have increased substantially. At the same time consumption figures are looking weak. Stocks in importing countries are starting to grow and this is likely to continue into Q2 2026,” according to Broster. “At the same time, the Middle East has become a substantial consumer; this consumption is likely to be suppressed given the situation.” 

Coffee Supply Chain Disruption 

However, Broster did not minimize the possibility of prolonged conflict, nor the gravity of what the situation may mean for key trade routes. 

“The pressure is on the Red Sea and Suez Canal again,” he said. “We were beginning to see increased trade flows, expediting shipping times and reducing costs. Given recent developments, this is off the table. But on the other side of the conflict, one would hope that more stability will return to the Red Sea region.” 

Broster explained the importance of these shipping lanes for coffee exports. 

“For coffees coming from Asia and East Africa, going via the Red Sea and Suez Canal saves both time and money. It also means ships can make more round trips, due to shortened trip and transit times. With this trade route, flow increases significantly. If this trade route is constrained again, then this puts pressure on the supply chain. Coffees moving from Central and South America to the major European and American markets will not be affected by these constraints.” 

As of market close on March 2, the price of robusta coffee futures in the London terminal made 3.87% gains versus the previous day, according to the Expana platform which shows the current price at $3,842/MT. At the same time, contract values for arabica on NY ICE were valued at 288.35 USc/LB, according to the Expana platform which showed a 1.32% gain from the previous trading day.

Robusta made slightly sharper gains due to the issues outlined by Broster. However, by the end of the interview with Oliver, NY market participants had woken up, and a 3 USc/LB bump in arabica futures on NY ICE was noted. 

Upcoming Coffee Surplus 

While no one is certain about what the future of the Middle Eastern conflict will look like, Broster and crew (formerly Tropical Research Services) are certain that coffee is real, it’s being sold, and there’s more to come. 

“Brazilian farmers still have stocks, and the final period [to sell] before the new crop is coming up,” he said. 

“We may trade sideways or higher for a couple of weeks due to nervousness around [the war],” said Broster. However, “the fundamental situation remains one of surplus. As such, any price improvement could provide a good selling opportunity for producers. The longer we wait, the closer the 2026/27 crop gets.” 

Broster noted that Asian growers in places like Vietnam, for example, have been selling more consistently. 

“So, it’s logical that producer stocks will be released—applying pressure for the next move lower. Brazil’s main crop is coming [in June 2026], and it should be a big one… High prices have already incentivized better husbandry and farm care and in effect high prices have cured high prices.”  

To Broster, the war news and supply chain narratives are cause for concern however unless there are other significant developments the forward balance sheet remains in surplus. Production in the main producing regions of Vietnam and Brazil (not to mention other nations) have been extremely good stimulated by good prices over the last couple of years.  

Having said that, his thinking implies that the situation in the Middle East is resolved in a somewhat timely manner, doesn’t escalate into these producing nations, and there will be consumers across the globe on the other side of the conflict who want coffee. 

Coffee Bounces on Conflict, Halting the Downtrend 

Previously, coffee prices dropped nearly 30% over three months, with arabica contracts at 286 USc/LB as of February 26, down from above 400 USc/LB in late 2025, according to Expana’s Oliver Broster. 

Rising supply, confirmed by certified exchange volumes and consistent Vietnamese sales, is pressuring the market. Brazilian producers are holding back, while origins like Nicaragua and Honduras sell more aggressively. 

With high output expected for 2026/27 crops, Broster sees potential for further declines. Despite current volatility, he notes that prices above 300 USc/LB were once record highs before the past 2-3 years.