Three supply shocks landed inside a single quarter. The result is the most violent Arabica price action in a generation.
Coffee does not usually move like this. Arabica is a slow market — weather builds over seasons, demand is sticky, and price discovery is patient. In 2026 that patience broke.
A drought across Minas Gerais thinned the cherry set just as a frost scare in São Paulo spooked the forward curve. Then a 50% US tariff on Brazilian imports rewired the physical flow overnight, pulling the financial market with it.
Model: ARIMA + GARCH forecast
Key findings
- Realized volatility roughly tripled versus its 2021–2024 baseline.
- The tariff shock, not the weather, drove the largest single-month repricing.
- Forward curve inverted as nearby contracts absorbed the supply panic first.
Method: front-month KC=F weekly close (Friday settlement, ¢/lb). Volatility = rolling annualized realized vol (weekly series). Source: refined KC_F_weekly.csv, Jun 2024–Jun 2026.