Citi has closed its bearish coffee trade at a loss after stronger El Niño trends emerged.
The trade followed a Citi assessment reported on 21 July 2026. Citi retained a bearish view after arabica had risen for five weeks to US$3.34 per pound. Citi attributed the rebound to short-covering and concerns about El Niño rather than an immediate shortage.
Citi raised its forecasts modestly but maintained arabica targets of US$2.50 per pound over 3 months and US$2.25 per pound over 12 months. It projected a global coffee surplus of 10.6 million 60-kilogram bags in 2025/26 and 8.2 million bags in 2026/27.
At the time of the July assessment, Brazil’s arabica harvest was 54% complete, while high domestic prices in Vietnam were encouraging producer sales.
Citi identified Brazil’s final crop volume, inventories at origin, rainfall across Asia and West Africa, and the duration of El Niño into 2027 as factors to monitor. The August trade extract did not disclose revised price targets.
