Coffee prices to stay firm as El Niño and supply risks tighten outlook
BMI has raised its 2026 average coffee-price forecast to 307 cents per pound, citing thin inventories, weather risks and a weaker Brazilian crop outlook for 2027-28. The trend could sustain input-cost pressure for coffee retailers, cafés and packaged-beverage brands, with India’s robusta supply also exposed to below-average rainfall.
What happened
retail-company · BMI expects coffee prices to remain supported by thin inventories, a weaker 2027-28 Brazilian crop outlook and El Nino weather risks. India is
Key facts
- BMI raised its 2026 average coffee-price forecast to 307 cents per pound from 293 cents
- Coffee prices rose from 240.9 cents per pound on June 9 to 332 cents on August 18
- Quarter-to-date average coffee price: 316 cents per pound
- Global coffee production forecast: 188.9 million bags in 2026-27, up 6%
- Brazil 2026-27 output forecast: 71.9 million bags, up 14.1% year-on-year
- Vietnam 2026-27 output forecast: 31.9 million bags, up 0.6%
- Brazil 2027-28 output forecast: 68 million bags, down 5.1% year-on-year
- Global surplus forecast: 14.4 million bags in 2026-27 and 9.2 million bags in 2027-28
Why this matters
Elevated supply volatility increases the strategic value of investments or partnerships in origin sourcing, processing capacity, coffee substitutes and traceable resilient-supply platforms.
What to watch
- Brazilian rainfall, flowering conditions, frost events and 2027-28 crop estimates.
- India monsoon performance and robusta export availability.
- Arabica and robusta futures curves, certified inventories, origin differentials and physical premiums.
- Global production and stock revisions from USDA, ICO and major commodity forecasters.
- Coffee retailer menu-price changes, packaged-coffee shelf-price inflation and promotional frequency.
- Consumer volume elasticity, loyalty traffic, at-home coffee sales and private-label share gains.
- Extend staggered coffee hedges rather than locking all volume at current elevated prices; diversify exposure across arabica, robusta, origins and contract durations.
- Accelerate blend optimization, coffee-content reformulation where brand standards permit, and supplier discussions on quality specifications, freight and payment terms.
- Prepare targeted price architecture: protect entry-price beverages and core retail packs while taking higher increases on premium, seasonal and customized drinks.
- Expand private-label, instant, ready-to-drink and lower-cost blend options to retain price-sensitive customers.
- Tighten promotion governance and monitor beverage attachment rates, loyalty frequency and consumer trade-down by market.
- Assess supplier concentration and establish contingency sourcing for Brazil and India-linked robusta exposure.