Nicaragua Coffee Output to Drop 4.7% on El Niño, Fertilizer Costs

Nicaragua's green coffee production is forecast to fall 4.7% to 2.44 million 60-kilogram bags in market year 2026/27, according to a recent report from the U.S. Department of Agriculture's Foreign Agricultural Service. The decline is attributed to El Niño-related drought risk and rising fertilizer costs, which are threatening yields in the Central American nation. El Niño typically brings drier conditions to the region during the critical flowering and fruit-setting stages, reducing the number of coffee cherries per tree. Meanwhile, fertilizer costs remain elevated due to global supply chain disruptions and high energy prices, squeezing farmer margins and limiting their ability to invest in crop maintenance. This combination of weather and cost pressures is expected to lower output from the previous season's 2.56 million bags.

For traders in the coffee market, this supply reduction from a key producer could tighten global availability and support arabica coffee prices. Nicaragua is a significant exporter of high-quality arabica, and any output shortfall may shift demand toward other origins such as Honduras, Guatemala, or Colombia. Arabica futures on the ICE exchange have already shown volatility in response to weather forecasts, and a sustained decline in Nicaraguan production could add upward pressure. NowPrice's real-time commodities quotes provide the latest arabica and robusta prices for market participants tracking these developments. Robust coffee consumption in the U.S. and Europe means that any supply disruption is quickly reflected in price movements, making timely data essential for hedging and procurement decisions.

Looking ahead, market attention will focus on the intensity of the El Niño weather pattern and its impact on other coffee-producing regions in Central America. The El Niño Southern Oscillation (ENSO) outlook from climate agencies will be key, as a strong event could also affect Brazil and Vietnam, the world's largest arabica and robusta producers, respectively. Additionally, fertilizer price trends and their effect on farmer input costs will be closely monitored as the 2026/27 season progresses. If fertilizer costs remain high, farmers may reduce applications, further lowering yields. The market will also watch for any signs of increased coffee leaf rust or other diseases, which thrive in the variable conditions El Niño brings. These factors will determine whether the production decline is an isolated event or part of a broader regional trend.