Coffee Price Forecast 2026: Key Factors Influencing (P3)

As the third article in our Coffee Price Forecast 2026 series, this report dives into the broader forces shaping global coffee prices in the upcoming year. From slowing global growth and persistent inflation to volatile weather patterns and rising geopolitical tensions, coffee producers and buyers alike are navigating an increasingly complex landscape. We explore how macroeconomic forecasts, climate disruptions like El Niño/La Niña, supply chain risks, and rising input costs—especially in key markets like Vietnam and Brazil—will impact the balance of supply, demand, and pricing. This analysis provides essential context for understanding where coffee prices may be headed and how stakeholders can adapt strategically.

Macroeconomic Environment

The global macroeconomic environment will have significant impacts on the coffee market in 2026, affecting both the supply and demand sides.

Economic Growth and Inflation:    

Major international organizations offer varying forecasts for global economic growth. The International Monetary Fund (IMF), in its January 2025 report, forecasts global growth to be 3.3% in both 2025 and 2026, below the historical average (2000-2019) of 3.7%. Global inflation is expected to fall to 4.2% in 2025 and continue to decrease to 3.5% in 2026. The World Bank, in its January 2025 report, also forecasts global economic growth to reach 2.7% in both 2025 and 2026. Meanwhile, the Organisation for Economic Co-operation and Development (OECD) has a more cautious view, forecasting global growth to slow to 2.9% in 2025 and remain at that level in 2026.   

A slowdown in global economic growth could affect consumer purchasing power, especially for non-essential products. However, in many countries, coffee is considered a daily essential, so demand may be less affected than for luxury goods. Nevertheless, if economic difficulties persist, consumers may switch to more affordable coffee types. Global inflation, even if it falls to the forecasted 3.5% in 2026 according to the IMF, could still keep production costs (including fertilizers, energy, transportation) at a higher level than in the pre-pandemic period. This will create a cost “floor” for coffee production and limit the potential for green coffee prices to fall deeply, even if supply improves. Agricultural input costs such as fertilizers, fuel, and transportation costs tend to fluctuate with general inflation and energy prices. If these costs remain high, coffee production costs will also be high, requiring higher selling prices for farmers to maintain profitability.   

Exchange Rates:

Exchange rate fluctuations, especially between the USD and the local currencies of major producing countries like Brazil (BRL) and Vietnam (VND), as well as the EUR/USD rate, will have a significant impact.

• For USD/VND: UOB Bank (Singapore) in May 2025 forecasted the USD/VND exchange rate to be 25,800 in Q1 2026. MUFG Bank (Japan) in its June 2025 forecast provided a figure of 26,300 for USD/VND in Q1 2026.   
• For USD/BRL: MUFG forecasts the USD/BRL exchange rate to be 5.8000 in Q1 2026. Trading Economics also provides a forecast of 5.69496 for USD/BRL in Q1 2026.   

If the USD strengthens against the Brazilian Real (BRL) and the Vietnamese Dong (VND) in 2026 as some forecasts indicate, this could create an incentive for farmers in Brazil and Vietnam to increase their sales. The reason is that when they convert their revenue from USD to local currency, they will receive more money, increasing their profits in local currency terms. Increased sales from top producing countries could increase supply on the world market, thereby putting downward pressure on coffee prices (in USD terms), even if other fundamental factors remain unchanged.

Table 3: Global Macroeconomic and Key Exchange Rate Forecasts for 2026

Climatic Conditions

Climatic conditions are one of the most volatile factors and have the most direct and powerful influence on global coffee production.

El Niño and La Niña Phenomena:The likelihood and intensity of the El Niño-Southern Oscillation (ENSO) phenomena during 2025-2026 will be a key factor. El Niño often causes different extreme weather patterns in coffee-growing regions. For example, in Brazil, El Niño can cause excessive rainfall, affecting bean quality and the harvesting process, or conversely, cause drought in other areas. Meanwhile, La Niña often brings higher rainfall to Robusta-growing regions in Southeast Asia like Vietnam and Indonesia, but can also cause other problems such as flooding or crop diseases if the rain is too heavy. The increasing frequency and intensity of these extreme weather events, possibly related to general climate change, are likely to lead to greater production volatility from year to year. This not only makes price forecasting more difficult but also has the potential to maintain a high level of price volatility in the market, as traders react quickly to every new piece of weather information.

Long-term Climate Change: Besides short-term ENSO phenomena, the long-term impacts of climate change on key coffee-growing regions are becoming increasingly apparent. Studies have shown that rising temperatures and erratic rainfall risk reducing yields and shrinking the area of land suitable for coffee cultivation, especially for the Arabica variety, which is more sensitive to temperature changes. Some studies estimate that by 2050, up to 50% of the land currently used for growing Arabica may no longer be suitable. This long-term threat to Arabica could further spur investment and research into higher-quality Robusta varieties (fine Robusta) and new hybrid varieties that are more tolerant of harsh climatic conditions. This shift, if successful, could significantly alter the global coffee production structure in the coming decades, with Robusta and hybrid varieties potentially capturing a larger market share. 

Geopolitical and Logistical Considerations

The stability of the global coffee supply chain and geopolitical factors are also elements that cannot be ignored when forecasting prices.
Supply Chain and Logistics Costs: Transportation costs and potential bottlenecks in the supply chain can affect the final coffee price. The Global Supply Chain Pressure Index (GSCPI) from the New York Federal Reserve showed a slight increase in May 2025, reflecting increased tension from geopolitical disruptions and lingering bottlenecks from the pandemic era. Increased shipping and insurance costs due to geopolitical risks, such as tensions in the Red Sea, can significantly increase the landed cost of coffee. This not only affects retail prices for consumers but can also reduce the profit margins of exporters if they are forced to absorb part of the increased costs to remain competitive.  

Geopolitical Risks: Conflicts, political instability in producing countries, or on key transportation routes can cause sudden supply disruptions or increase costs. The rise in global geopolitical tensions and the trend of supply chain shifts towards “friend-shoring” (prioritizing trusted geopolitical partners) or “near-shoring” (moving production closer to consumer markets) could lead major roasters to seek greater diversification of their coffee sources. They may reduce their dependence on a few major producing countries to mitigate risk. This, on the other hand, could create opportunities for smaller or emerging producers if they can ensure product quality and supply reliability.

Production Costs and Farm Economics

Production cost is the fundamental factor that determines the price at which farmers are willing to sell and their ability to reinvest. Input Costs: Key input costs such as fertilizers, pesticides, and fuel tend to fluctuate sharply with global energy prices and geopolitical factors. For example, in Vietnam’s Central Highlands, the prices of NPK fertilizers in April 2025 ranged from 13,100 to 19,100 VND/kg depending on the type, while Urea was priced around 11,900 – 13,100 VND/kg. The cost of organic fertilizers and foliar fertilizers are also significant expenses. The volatility of fertilizer prices will continue to be a major uncertainty. If fertilizer prices remain high or rise again in 2026, this could limit the potential for green coffee prices to fall deeply, even if global production increases, as farmers would need higher selling prices to cover their costs.  

Labor Costs: Labor costs, especially for harvesting, are also a significant component of total production costs. Labor shortages in agriculture in some key coffee-growing regions, combined with inflation driving up wage demands, could push harvesting labor costs higher. This particularly affects coffee types that require selective hand-picking, such as high-quality Arabica or specialty coffee, adding further cost pressure to these segments. Although specific data on labor costs for 2024-2025 is limited , reports from the 2023-2024 crop year have already shown the importance of this factor.   

The impact of these costs on farmers’ profits will directly affect their investment decisions for future crops, including the 2026/27 crop year. If profit margins are squeezed due to falling selling prices while input costs remain high, farmers may reduce their level of investment in farm care, leading to lower productivity and output in subsequent years.

At Helena Coffee Vietnam, we don’t just follow market trends—we help shape them. As one of Vietnam’s leading green coffee producers and exporters, Helena supports sustainable farming, transparent sourcing, and value-added services for partners around the world. With deep roots in the Central Highlands and strong global insights, we provide not only high-quality Robusta and Arabica but also timely market intelligence that empowers your decisions in a volatile landscape.

As climate shifts, costs rise, and global regulations tighten, Helena is here to help you navigate uncertainty—and turn it into opportunity.