Coffee prices are rallying sharply as renewed El Niño concerns raise the risk of weather-related production losses in Brazil and Vietnam, two of the world’s most important coffee-growing countries. December 2026 New York arabica futures jumped 3.30%, while November London robusta futures gained 2.05%, as traders reassessed the risk of future supply disruptions despite forecasts for a record global coffee crop.
The coffee price forecast is increasingly divided between near-term bullish weather risks and a potentially bearish global supply outlook. Drought concerns in Vietnam and the possibility of adverse weather across South America are supporting prices, while improving rainfall, rising Brazilian exports and forecasts for record production could limit the rally. The contrast between declining arabica inventories and rising robusta stocks also points to different supply dynamics across the two markets.
Market Snapshot
| Market Indicator | Latest Reported Position |
|---|---|
| December 2026 Arabica Coffee | Up 10.10 points, or 3.30% |
| November 2026 Robusta Coffee | Up 70 points, or 2.05% |
| Arabica price action | Six-week high |
| ICE arabica inventories | 260,654 bags at the September 30 reported level |
| ICE robusta inventories | 5,964 lots, an 11.5-month high |
| Brazil September coffee exports | 236,000 tonnes, up more than 20% year-on-year |
| Vietnam September coffee exports | 124,000 tonnes, up 53% year-on-year |
| Vietnam January–September 2026 exports | 1.45 million tonnes, up 16.2% year-on-year |
| ICO 2025/26 global production forecast | Record 183.6 million bags |
| ICO 2025/26 global consumption forecast | 180.6 million bags |
| ICO 2025/26 global balance | Surplus of 3 million bags |
| USDA 2026/27 global production forecast | Record 189.7 million bags |
| Main bullish factor | Potential El Niño-related crop disruption |
| Main bearish factor | Forecast record global production and strong exports |
Figures are reproduced from the supplied report and refer to different reporting dates and crop-year estimates.
Current Coffee Price Action: Arabica Leads the Rally
Coffee futures rose sharply, with arabica reaching a six-week high as weather risks returned to the forefront of market sentiment.
December 2026 arabica futures advanced 10.10 points, gaining 3.30%, while November 2026 robusta futures rose 70 points, or 2.05%.
The rally reflects concerns that El Niño could disrupt coffee production in Brazil and Vietnam during the coming crop cycle. Weather-related uncertainty can prompt traders to price in a potential supply premium before any production losses are confirmed.
However, the two coffee markets face different inventory conditions. Arabica stocks have recently been relatively low, while robusta inventories have risen to an 11.5-month high. This divergence could leave arabica more sensitive to renewed supply concerns, while robusta remains exposed to the risk of abundant available stocks.
The immediate question is whether weather fears will continue to outweigh evidence of stronger production and exports.
El Niño Weather Outlook: A Key Risk for Coffee Production
The potential development of a strong El Niño is a major source of uncertainty for global coffee supplies.
Vietnam’s Agriculture Ministry has warned that the Central Highlands, the country’s largest coffee-growing region, could face an El Niño-related drought later this year and in early 2027.
Drier conditions can reduce soil moisture, place stress on coffee trees and affect flowering, fruit development and yields. If drought conditions persist during critical growing stages, production could be affected in a market already sensitive to changes in export availability.
Brazil also faces weather uncertainty. El Niño can alter rainfall patterns across South America, although its precise effects vary by region and season.
The US Climate Prediction Center has described the developing weather pattern as potentially one of the strongest in more than 75 years, according to the supplied report. Such forecasts are important risk indicators, but they do not establish that a specific production loss will occur.
For coffee traders, the decisive evidence will come from changes in rainfall, soil moisture, crop development and subsequent production estimates.
Bullish Sentiment: Factors Supporting Coffee Prices
- El Niño-related drought risks: Potentially adverse weather in Brazil and Vietnam could reduce yields and tighten global coffee supplies.
- Arabica’s relatively low inventories: ICE arabica stocks previously fell to a 27-year low of 217,646 bags on September 15, highlighting the market’s vulnerability to supply disruptions.
- Colombian production decline: Colombia’s 2025/26 coffee production fell 15% year-on-year to 12.65 million bags, while exports declined 12% to 11.78 million bags.
- Potentially weaker future crops: Early assessments point to production risks in major growing regions, particularly if adverse weather coincides with critical crop-development stages.
- Strong recent price momentum: Arabica’s move to a six-week high may attract additional buying if traders continue to raise their estimates of weather-related supply risks.
- Different arabica and robusta supply dynamics: Lower historical arabica inventories could leave that market more exposed to a renewed supply shock than robusta.
Bearish Sentiment: Risks That Could Limit the Rally
- Forecast record global production: The USDA expects 2026/27 global coffee output to reach 189.7 million bags, an increase of 6% year-on-year.
- Improved Brazilian crop prospects: Conab raised its 2026 production estimate to 67.6 million bags, while favourable rainfall during flowering could support the following crop.
- Rising Brazilian exports: September shipments reached 236,000 tonnes, up more than 20% year-on-year, indicating stronger export availability.
- Growing Vietnamese exports: Vietnam’s September shipments rose 53% year-on-year, while January–September exports increased 16.2%.
- Higher robusta inventories: ICE robusta stocks reached 5,964 lots, an 11.5-month high, limiting the urgency of buying in that market.
- Global surplus in 2025/26: The International Coffee Organization estimates production of 183.6 million bags against consumption of 180.6 million bags, leaving a 3-million-bag surplus.
- Improving rainfall in Brazil and Vietnam: Recent precipitation has improved soil moisture and could support crop development if conditions remain favourable.
Coffee Price Forecast: What Traders Are Watching
Coffee’s immediate outlook is supported by weather uncertainty, but the longer-term supply picture remains bearish if record production forecasts are realised.
Bullish scenario: Prices could extend their rally if drought develops in Vietnam, adverse weather disrupts Brazil’s crop or production estimates are revised lower. Arabica could remain particularly sensitive if inventories stay relatively tight and Colombian supply remains constrained.
Bearish scenario: Coffee could retreat if rainfall continues to support crop development, Brazilian exports remain strong and Vietnam’s production and shipment volumes continue to increase. Rising robusta inventories and confirmation of record global output would strengthen the case for lower prices.
Consolidation scenario: Prices could trade unevenly if weather concerns support futures while stronger exports and production estimates cap gains. In this environment, markets may react sharply to each new crop forecast and weather update.
The latest gains indicate a shift in short-term sentiment, but the supplied figures do not establish confirmed technical support or resistance levels. A sustained rally would require evidence that supply risks are translating into lower production or tighter inventories.
Brazil Coffee Production: Larger Crops Could Weigh on Prices
Brazil is the world’s largest coffee producer, making its crop outlook central to international price direction.
Conab raised its 2026 production estimate to 67.6 million bags from 66.7 million bags. Its forecast included arabica production of 48.21 million bags, up 34.8% year-on-year, while robusta output was expected to decline 6.6% to 19.39 million bags.
Separately, the USDA’s Foreign Agricultural Service forecast a record 2026/27 Brazilian crop of 71.9 million bags, up 14% year-on-year.
These estimates refer to different forecasts and reporting periods, so they should not be treated as directly interchangeable. Nevertheless, both point to the potential for substantial Brazilian supply.
Recent rainfall in Minas Gerais, the country’s main arabica-growing region, adds another bearish consideration. Somar Meteorologia reported 48.6 millimetres of rain during the week ended October 18, equivalent to 148% of the historical average.
Rainfall during flowering can support crop development when moisture has been insufficient. However, the ultimate effect depends on timing, distribution and subsequent weather conditions.
If favourable growing conditions persist, expectations of a larger Brazilian crop could place renewed pressure on arabica prices, particularly if export availability also improves.
Vietnam Coffee Outlook: Robusta Supply and Drought Risks
Vietnam is the world’s largest robusta producer, and its export performance remains a major influence on the global coffee market.
Vietnam’s National Statistics Office reported September coffee exports of 124,000 tonnes, up 53% year-on-year. Exports for January–September reached 1.45 million tonnes, an increase of 16.2%.
Vietnam’s 2025 calendar-year exports also rose 17.5% to 1.58 million tonnes. Production for the 2025/26 season is projected to increase 6% year-on-year to a four-year high of 1.76 million tonnes, equivalent to approximately 29.4 million bags.
These figures point to strong recent supply availability, helping explain why robusta inventories have increased.
However, the outlook could change if El Niño-related drought develops in the Central Highlands. Reduced rainfall during important crop-development stages could affect future yields and offset some of the benefit from the current production recovery.
The key distinction is between strong current exports and the risk of lower future output. Traders will need to monitor crop conditions and inventory movements to determine whether the supply balance is tightening or remaining comfortable.
Coffee Inventory Outlook: Arabica and Robusta Diverge
Inventory levels provide an important explanation for the different price sensitivities of the two coffee varieties.
ICE arabica inventories fell to 217,646 bags on September 15, their lowest level in 27 years, before recovering to 260,654 bags on September 30. The recovery indicates some improvement in certified availability, but the earlier low highlights the market’s sensitivity to supply interruptions.
By contrast, ICE robusta inventories rose to 5,964 lots, an 11.5-month high. Higher stocks can reduce immediate scarcity concerns and limit the impact of weather-related buying.
The distinction matters because a weather shock does not affect all coffee markets equally. Arabica may respond more sharply to disruptions in Brazil or Colombia when available stocks are tight, while robusta could remain under pressure if Vietnam continues supplying large volumes.
Traders should monitor subsequent inventory data alongside export and production figures rather than treating the two coffee markets as having identical fundamentals.
Global Coffee Supply and Demand: Surplus Risks Remain
The International Coffee Organization estimates that 2025/26 global coffee production increased 4.4% year-on-year to a record 183.6 million bags, while consumption declined 0.9% to 180.6 million bags. This leaves a projected global surplus of 3 million bags, the first surplus in five years.
The USDA’s outlook is also bearish for prices. It forecasts 2026/27 global production increasing 6% to a record 189.7 million bags, with global ending stocks rising by 1.9 million bags to 26.3 million bags.
The USDA expects arabica production to increase 12% year-on-year, while robusta output is projected to decline 0.7%.
These forecasts suggest that the global market could remain well supplied if favourable growing conditions translate into the expected harvests. However, weather risks could alter the balance, particularly if drought affects Brazil or Vietnam during critical development periods.
The market will therefore be balancing a projected surplus against the possibility that future production falls short of current expectations.
Colombia Coffee Production: Lower Output Tightens Arabica Availability
Colombia’s declining production provides a further source of support for arabica prices.
The Colombian Coffee Federation reported that 2025/26 production fell 15% year-on-year to 12.65 million bags. Exports declined 12% to 11.78 million bags.
As the world’s second-largest arabica producer, Colombia is an important source of high-quality coffee. Lower output can reduce export availability and tighten supplies for buyers seeking Colombian-origin beans.
However, the broader price impact will depend on whether production declines persist and whether increased output from Brazil or other origins can compensate.
For arabica traders, the combination of lower Colombian production and weather uncertainty in Brazil creates a potential source of support, even while global production forecasts remain high.
Market Outlook for the Coming Sessions
Coffee prices are likely to remain sensitive to weather developments, export figures and inventory changes.
The main indicators to monitor are:
- Brazilian weather: Whether rainfall continues to support flowering and crop development or gives way to adverse conditions.
- Vietnam’s drought risk: Whether El Niño develops into a material threat to Central Highlands production.
- Brazilian exports: Whether the recent increase in shipments continues.
- Vietnamese exports: Whether robusta supply remains abundant or starts to tighten.
- Arabica inventories: Whether stocks stabilise or begin declining again.
- Robusta inventories: Whether rising stocks continue to limit price gains.
- Colombian production: Whether lower output persists into the next crop cycle.
- Global balance estimates: Whether the ICO and USDA revise their production and surplus forecasts as new information emerges.
The near-term outlook is cautiously bullish on weather risk, particularly for arabica, but the medium-term outlook remains constrained by expectations of record global production. Sustained gains will require evidence that supply risks are becoming more tangible than the current forecasts suggest.
Currency Hedger View: Coffee Prices and International Purchasing Costs
Coffee roasters, importers, distributors and food-service businesses often face a combination of commodity-price volatility and foreign-exchange exposure.
Coffee is traded internationally, and changes in the US dollar can affect the local-currency cost of beans. A company purchasing coffee in dollars but earning revenue in euros, pounds or another currency may face higher costs if the dollar strengthens, even when the underlying coffee price is unchanged.
Businesses with recurring international purchases should assess their commodity exposure alongside their currency requirements. Suitable currency hedging arrangements may help provide greater certainty over future payment costs, depending on the business’s circumstances and contract terms. Currency hedging does not eliminate the underlying risk of coffee-price movements.
Manage international currency exposure with Currency Hedger:
Today Markets Analysis
Coffee prices have rallied as El Niño concerns raise the possibility of future production losses in Brazil and Vietnam. Arabica’s move to a six-week high reflects renewed sensitivity to weather risks, while lower Colombian production and historically tight arabica inventories offer additional support.
However, the broader supply outlook remains a significant counterweight. Brazilian and Vietnamese exports have increased, the ICO estimates a global surplus for 2025/26, and the USDA forecasts record global production for 2026/27.
The market’s next sustained move will depend on whether weather risks translate into measurable crop damage or whether favourable growing conditions allow production to meet current expectations. Arabica may remain more sensitive to tight inventory conditions, while robusta faces greater pressure from rising stocks and strong Vietnamese exports.
Market analysis by Today Markets, with international payment and currency exposure insights from Currency Hedger.
Risk Disclaimer: This material is provided for informational and educational purposes only and does not constitute investment advice, financial advice, or a recommendation to buy or sell any financial instrument. Coffee futures can be highly volatile, and leveraged trading can result in substantial losses. Forecasts and market scenarios are conditional and are not guarantees of future performance. Traders should conduct their own research and assess their risk tolerance before making investment decisions.
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