Coffee prices have moved higher as concerns over Colombia’s declining production and the potential impact of El Niño on future harvests offset expectations for abundant global supplies. December arabica coffee futures gained 1.83% to close at the equivalent of a 5.35-cent increase, while November robusta futures rose 0.69%, adding 24 points.

The market faces competing forces. Lower Colombian output and weather uncertainty in Brazil create upside risks, while stronger export flows from Brazil and Vietnam, improving growing conditions and forecasts for record global production could limit further gains. The direction of prices will depend on whether supply disruptions become more significant than the anticipated increase in global availability.

Market Snapshot

• December arabica futures: Up 5.35 cents, or 1.83%.
• November robusta futures: Up 24 points, or 0.69%.
• Colombia 2025/26 production: Down 15% year on year to 12.65 million bags.
• Colombia 2025/26 exports: Down 12% to 11.78 million bags.
• Brazil September coffee exports: Up more than 20% year on year to 236,000 metric tonnes.
• Global 2025/26 production forecast: 183.6 million bags, according to the International Coffee Organization.
• Global supply balance: The ICO projects a surplus of 3 million bags for 2025/26.

Arabica Coffee Analysis: Colombia’s Declining Output Supports Prices

Arabica coffee is receiving support from concerns over Colombian supply. Colombia is a major producer of arabica, and the reported 15% year-on-year decline in 2025/26 production to 12.65 million bags, alongside a 12% reduction in exports to 11.78 million bags, points to a tighter contribution from an important origin.

If lower production persists, exporters may have less coffee available to meet international demand. This could increase competition for available beans, particularly if buyers seek to secure supplies ahead of uncertainty surrounding the next Brazilian crop.

ICE arabica inventories are another important indicator. Stocks fell to a 27-year low of 217,646 bags on September 15 before recovering to 260,654 bags on September 30. Although the rebound suggests some replenishment, inventories remain an important measure of readily available exchange-certified supply. Further stock declines could amplify the effect of production disruptions, while sustained inventory growth would weaken the scarcity argument.

However, Colombian supply concerns must be weighed against the broader outlook for Brazil. If Brazilian arabica production improves as expected, additional supplies could offset part of Colombia’s shortfall and limit the durability of the current price recovery.

Brazil’s Coffee Crop: El Niño Creates Weather Uncertainty

Weather conditions in Brazil remain central to the arabica outlook. Coffee trader Commercial has warned that El Niño could delay rainfall during a critical flowering period, potentially affecting the 2026/27 crop.

Flowering is an important stage in coffee development. Poorly timed rainfall or adverse temperatures can affect flowering, fruit setting and ultimately the number and development of cherries available for harvest. If adverse weather persists across major growing areas, expectations for Brazil’s next crop could be revised lower.

Nevertheless, current rainfall data also point to a more favourable possibility. Somar Meteorologia reported 33.3 millimetres of rainfall in Minas Gerais during the week ended October 4, equivalent to 104% of the historical average. Adequate moisture during flowering can support crop development, provided rainfall distribution and temperatures remain favourable.

This creates a significant uncertainty for prices: the market must balance the possibility of future weather damage against evidence that current growing conditions may be supporting production.

Brazil’s crop estimates remain substantial. Conab raised its 2026 production estimate to 67.6 million bags from 66.7 million. Arabica output is forecast to rise 34.8% year on year to 48.21 million bags, while robusta production is expected to fall 6.6% to 19.39 million bags.

The USDA’s separate forecast places Brazil’s 2026/27 crop at a record 71.9 million bags, up 14% year on year. Differences between crop forecasts reflect different estimates and assumptions, but both highlight the potential for substantial Brazilian supply.

Robusta Coffee Analysis: Vietnam’s Export Growth Limits Gains

Robusta faces a different supply picture, with Vietnam’s export growth creating a significant headwind. Vietnam is the world’s largest robusta producer, and its export performance provides an important indication of the availability of coffee for international buyers.

Vietnam’s September exports increased 53% year on year to 124,000 metric tonnes. Exports from January to September rose 16.2% to 1.45 million tonnes, while 2025/26 production is projected to increase 6% to a four-year high of 1.76 million tonnes, equivalent to approximately 29.4 million bags.

These figures suggest that Vietnam could provide greater export availability if production and logistics remain favourable. Recent rainfall has also improved soil moisture in the Central Highlands, the country’s principal coffee-growing region, potentially supporting cherry development.

For robusta prices, the key question is whether higher exports represent a sustained increase in available supply or simply the release of stocks accumulated earlier in the season. If exports remain strong alongside improving production, prices could face continued downward pressure despite short-term gains.

ICE robusta inventories climbed to a 10.5-month high of 5,398 lots on September 24 before falling to 5,115 lots last Friday. The decline offers some evidence of tighter exchange stocks, but the broader inventory trend and incoming Vietnamese shipments will remain important.

Global Coffee Supply: Record Production Could Cap the Rally

The wider global balance remains a bearish consideration. The International Coffee Organization forecasts 2025/26 production at a record 183.6 million bags, up 4.4% year on year, while consumption is projected to fall 0.9% to 180.6 million bags.

That would leave a global surplus of approximately 3 million bags, the first surplus in five years according to the ICO. If these projections materialise, buyers may have less incentive to compete aggressively for supplies, especially if inventories begin to recover.

The USDA also expects global coffee production to rise by 6% in 2026/27 to a record 189.7 million bags. Global arabica production is forecast to increase 12%, while robusta production is expected to edge down 0.7%. World ending stocks are projected to increase by 1.9 million bags to 26.3 million.

These forecasts create a ceiling risk for prices. However, global production estimates do not guarantee that coffee will be available at the right time, quality and location. Weather disruptions, export bottlenecks and low exchange-certified inventories can still produce short-term shortages even when the overall market is expected to record a surplus.

Bullish Scenario

Coffee prices could extend their recovery if Colombian production remains weak and El Niño disrupts flowering or crop development in Brazil. Lower arabica inventories would increase sensitivity to any reduction in export availability.

Robusta could also strengthen if Vietnamese export growth slows, weather conditions deteriorate or exchange stocks decline further. A deterioration in global crop forecasts would challenge expectations of a substantial surplus and encourage buyers to secure supplies earlier.

Bearish Scenario

Prices could weaken if Brazil delivers a larger-than-expected crop and favourable rainfall supports flowering and cherry development. Continued growth in Vietnamese exports would add pressure to robusta, while the anticipated increase in global production could improve buyer availability across both varieties.

If consumption remains subdued and the projected global surplus materialises, commercial buyers may reduce precautionary purchasing. Rebuilding exchange inventories would further undermine the scarcity premium, particularly for arabica.

Coffee Price Forecast

The near-term outlook is mixed, with weather uncertainty and regional supply constraints supporting prices while global production forecasts remain bearish.

Arabica is particularly sensitive to Colombian output, Brazilian flowering conditions and the availability of exchange-certified stocks. Robusta is more exposed to Vietnam’s production and export trajectory, making the pace of shipments an important determinant of price direction.

The medium-term outlook will depend on whether weather risks translate into measurable crop losses. If production estimates remain high and exports continue to expand, the recent rally may prove temporary. If adverse weather reduces expected yields while inventories remain tight, coffee prices could receive further support.

Market Outlook: What to Watch Next

• Brazilian flowering and rainfall: Monitor whether rainfall remains adequate across major arabica-growing regions and whether weather forecasts alter expectations for the next crop.
• Colombian production and exports: Further declines could tighten arabica availability.
• Vietnamese exports: Continued growth would weigh on robusta, while a slowdown could improve the supply outlook.
• ICE arabica inventories: Sustained declines would increase the risk of a tighter readily available supply.
• ICE robusta inventories: Further stock changes will help assess whether rising exports are translating into greater market availability.
• ICO and USDA estimates: Revisions to production, consumption and ending stocks could reshape expectations for the global surplus.
• Global consumption: A recovery in demand would help absorb the projected increase in production, while weaker consumption would reinforce the bearish supply outlook.

Currency Hedger View

Coffee markets demonstrate how agricultural prices respond to weather, crop yields, export flows, inventories and changing consumption patterns. For coffee roasters, importers, exporters and food businesses, price fluctuations can affect purchasing budgets and operating margins. Currency movements can add another layer of uncertainty when coffee is traded across borders or purchased in US dollars.

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Analysis: Louis Roche, Today Markets

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to trade. Coffee futures and other commodity markets involve significant risk. Forecasts are conditional scenarios, not guarantees of future performance.