Coffee price jumps over 8% as ICO warning on Strait of Hormuz instability

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Coffee jumps 8.04% to $339 today

Highlights

Rising instability in the Strait of Hormuz is driving up energy, fertilizer, and shipping costs for the global coffee sector.
The International Coffee Organization advises industry players to increase inventories as supply chain risks elevate price volatility.
Coffee futures show strong bullish momentum with buyers dominant, projected to range between $314.04 and $363.96 over the next 2–3 days.

Supply chain risks spur buying as cost concerns mount

Instability in the Strait of Hormuz has prompted the International Coffee Organization (ICO) to warn that coffee sector costs may rise, mainly as higher energy prices, fertilizer expenses, and shipping insurance weigh on global supply logistics, according to Foodingredientsfirst. While the ICO does not anticipate an immediate shortage of coffee beans, the outlook for increased input costs elevates sector risk and encourages precautionary inventory measures across the industry. This heightened sensitivity to supply chain threats has contributed to recent buying interest, aligning with the current strong move in coffee futures.

Mixed momentum and overbought signals as divergence emerges

On the H4 chart, KC trades above the MA-20 at $316.67 and the MA-50 at $320.45, while remaining well above the MA-200 at $308.32 on the daily timeframe. The Ichimoku Kijun on the daily chart is positioned at $324.21, serving as immediate support. The Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX) are both neutral, indicating no clear momentum direction. The Relative Strength Index (RSI) stands at 58.8 and suggests further buying action, while the Commodity Channel Index (CCI) is overbought. Bull/Bear Power is also overbought, highlighting dominant buyer pressure intraday. In contrast, the Stochastic RSI signals a strong sell, indicating that not all oscillators confirm the continuation of the current move and divergence is present.

Bullish consolidation likely as volatility defines range

Over the next two to three trading days, the projected price range is $314.04 to $363.96, reflecting a typical volatility band relative to current levels. There is a 67% probability of an upward move, making further downside less likely. The baseline scenario calls for price consolidation within this band, with a bullish breakout possible if resistance is surpassed to target the upper end, and risk of a short-term retreat if immediate support at $324.21 is breached.

Viktoras Karapetjanc, expert at Traders Union, sees coffee’s rally as fundamentally justified by heightened sector risk and macro pressures around the Strait of Hormuz. He notes that strong buying is supported by increased input costs and a robust technical position above key averages. However, he acknowledges some oscillator divergence, which may lead to volatility around support levels. Karapetjanc believes the bullish case dominates with consolidation as the baseline scenario. "Rising industry costs and persistent macro risk support further upside for coffee — I expect buyers to remain active as long as support above $324.21 holds."

Earlier, analysts noted that bullish momentum in coffee prices was strengthening amid technical uptrend signals and improving market sentiment. The current environment adds the risk of cost-driven supply chain disruptions to the mix, with traders advised to monitor inventory responses and volatility near $363.96 as a potential inflection point for a breakout or reversal.

Source of Data: KC Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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