Coffee prices came under renewed pressure on Monday, with both arabica and robusta futures falling to three-month lows as expectations for abundant global supplies continued to dominate market sentiment. December ICE arabica coffee settled 4.10 points lower at 277.10, down 1.46%, while November ICE robusta coffee declined 59 points to 3,335, a loss of 1.74%.

The coffee market has been under pressure for approximately three weeks as traders increasingly focus on expectations for record global production during the 2025/26 and 2026/27 seasons. The International Coffee Organization has projected a return to a global surplus, while the latest USDA outlook points to another record crop in 2026/27.

Improving growing conditions in Brazil and Vietnam are adding to the bearish supply narrative. Brazil’s current harvest is nearing completion, allowing large volumes of coffee to enter export markets, while beneficial rainfall in Brazil’s Minas Gerais region could support flowering and the next arabica crop.

However, the supply outlook is not without risks. ICE arabica inventories remain historically low despite their recent recovery, while the potential impact of El Niño on Brazil’s 2026/27 crop provides an important medium-term bullish counterweight. The market is therefore balancing an increasingly comfortable global supply outlook against weather risks that could disrupt production later in the cycle.

Coffee Market Snapshot

Market Factor	Latest Development	Price Impact
December Arabica	-4.10, -1.46%	Bearish
November Robusta	-59, -1.74%	Bearish
2025/26 Global Production – ICO	183.6M bags, +4.4% y/y	Bearish
2025/26 Global Balance – ICO	3M-bag surplus	Bearish
Brazil August Coffee Exports	4.155M bags, +31% y/y	Bearish
Brazil August Arabica Exports	2.87M bags, +26% y/y	Bearish
Brazil August Robusta Exports	953,592 bags, +54% y/y	Bearish
Vietnam Jan-Aug 2026 Exports	1.33M MT, +13.7% y/y	Bearish
ICE Arabica Stocks	258,415 bags	Mixed
ICE Robusta Stocks	5,043 lots	Bearish
USDA 2026/27 Global Crop	189.7M bags, +6% y/y	Bearish
USDA 2026/27 Global Ending Stocks	26.3M bags, +1.9M	Bearish
USDA 2026/27 Brazil Crop	71.9M bags, +14% y/y	Bearish

Coffee Prices Today: Futures Hit Three-Month Lows

December arabica and November robusta both declined sharply enough to reach three-month lows as traders continued to price in expectations for larger global coffee availability.

The selling pressure has intensified over the past three weeks as production estimates have become increasingly bearish. The ICO’s latest assessment points to a return to surplus conditions, while the USDA is forecasting another record global crop for 2026/27.

The immediate market narrative is therefore centred on supply.

For arabica, the biggest pressure is coming from Brazil, where the current harvest is approaching completion and substantial export volumes are entering the international market.

For robusta, Vietnam is providing an additional source of supply pressure, with higher exports and expectations for increased production during the 2025/26 season.

Global Coffee Market Returns to Surplus

One of the most important bearish developments is the International Coffee Organization’s latest global balance estimate.

On September 10, the ICO projected 2025/26 global coffee production at a record 183.6 million bags, representing an increase of 4.4% year-over-year.

At the same time, global consumption was projected to decline 0.9% to 180.6 million bags.

The result is an estimated 3 million-bag global surplus, which would represent the first surplus in five years.

This marks a significant change in the supply-demand balance following several seasons in which weather problems and production disruptions kept the market relatively tight.

A return to surplus conditions is therefore providing a substantial fundamental headwind for prices.

Brazil Coffee Exports Surge

Brazil’s export data reinforces the bearish supply picture.

Cecafe reported on September 10 that Brazilian coffee exports reached 4.155 million bags in August, an increase of 31% year-over-year and a record for the month of August.

Arabica exports increased 26% to 2.87 million bags, while robusta exports surged 54% to 953,592 bags.

Brazil’s Trade Ministry also reported that August coffee exports increased 44.6% year-over-year to 206,618 metric tons, representing the strongest export volume in eight months.

The increase comes as Brazil’s harvest approaches completion, allowing the large crop to move into international markets.

The resulting increase in physical availability is putting downward pressure on futures prices, particularly as traders anticipate continued export flows.

Brazil Weather Supports the Next Crop

Weather conditions are also currently favouring higher production expectations.

Somar Meteorologia reported that 33.4 mm of rain fell in Minas Gerais during the week ending September 20.

That represented approximately 242% of the historical average for the region.

Minas Gerais is Brazil’s main arabica-producing region, making rainfall during the flowering period particularly important.

Adequate moisture during this stage can support flowering and subsequent cherry development, potentially improving prospects for the 2026/27 arabica crop.

This is therefore another bearish factor for prices, particularly when combined with expectations for a record Brazilian crop.

Vietnam Supply Weighs on Robusta

Vietnam’s production and export outlook is particularly important for robusta coffee.

Vietnam is the world’s largest robusta producer, and its latest export data points toward significantly greater availability.

Vietnam’s National Statistics Office reported on September 2 that coffee exports during January-August 2026 increased 13.7% year-over-year to 1.33 million metric tons.

Vietnam’s full-year 2025 coffee exports also increased 17.5% to 1.58 million MT.

Meanwhile, 2025/26 Vietnamese coffee production is projected to increase 6% year-over-year to 1.76 million MT, equivalent to approximately 29.4 million bags.

The combination of higher production and stronger exports is creating additional pressure on robusta prices.

Arabica Inventories Remain Historically Tight

One of the key differences between arabica and robusta is the inventory situation.

ICE arabica coffee inventories recently fell to just 217,646 bags, the lowest level in 27 years.

Stocks subsequently recovered to 258,415 bags, a 1.5-month high, but inventories remain historically low.

This provides an important bullish argument for arabica.

Low certified inventories can make the market more sensitive to any disruption in physical availability, particularly if exporters or roasters need to source deliverable coffee quickly.

The recent inventory recovery is bearish at the margin, but the absolute level remains an important underlying support factor.

Robusta Inventories Move Higher

Robusta has a very different inventory profile.

ICE robusta inventories climbed to approximately 5,043 lots, the highest level in 9.5 months.

Rising stocks suggest that physical availability is improving and reinforce the bearish production narrative surrounding Vietnam and other robusta-producing regions.

This inventory divergence is one reason arabica and robusta may not necessarily follow identical price paths even though both are currently being pressured by the broader global supply outlook.

USDA Forecasts Record 2026/27 Coffee Production

The latest USDA biannual outlook is another significant bearish factor.

On July 22, the USDA forecast 2026/27 global coffee production at 189.7 million bags, an increase of approximately 6% year-over-year, or 10.8 million bags.

The USDA expects global arabica production to increase approximately 12%, while robusta production is projected to decline by around 0.7%.

Global ending stocks are also expected to rise by approximately 1.9 million bags to 26.3 million bags.

The combination of higher production and higher ending inventories suggests that the USDA expects global availability to improve substantially.

Brazil 2026/27 Crop Could Reach Record Levels

Brazil is central to the USDA’s bullish production outlook.

The USDA’s Foreign Agricultural Service forecast on June 3 projected a record 71.9 million bags for Brazil’s 2026/27 coffee crop, representing an increase of 14% year-over-year.

If achieved, such a crop would significantly increase global arabica availability.

The forecast also explains why beneficial rainfall in Minas Gerais is currently receiving close attention from traders. If weather remains favourable through the flowering and development stages, expectations for a large Brazilian crop could become increasingly entrenched.

El Niño Creates Medium-Term Coffee Risk

Despite the strong production outlook, weather remains the biggest potential threat to the bearish narrative.

Coffee trader Commercial warned that El Niño could delay rainfall in Brazil during September and October, the period when coffee trees normally flower.

A delayed or inadequate rainfall pattern could negatively affect the 2026/27 Brazilian crop, potentially undermining the current record-production expectations.

The US Climate Prediction Center said on July 8 that the El Niño pattern that emerged across the equatorial Pacific could become one of the strongest in more than 75 years.

Such a weather pattern can produce significant variations in rainfall and temperatures across major agricultural regions.

For coffee, this creates a potential medium-term supply risk across both South America and Asia.

Bullish Sentiment

1. Historically Low Arabica Inventories

ICE arabica stocks recently fell to a 27-year low of 217,646 bags, demonstrating that immediately deliverable supplies remain historically tight.

2. El Niño Weather Risk

A potentially strong El Niño could disrupt rainfall patterns across Brazil and other coffee-producing regions, threatening the 2026/27 crop.

3. Brazilian Flowering Vulnerability

September and October are critical for Brazil’s coffee flowering cycle. Any prolonged dryness during this period could reduce the potential size of the next crop.

4. Weather Volatility in Asia and South America

Potential floods, droughts and temperature fluctuations associated with El Niño could create production risks even while current supply estimates remain strong.

5. Arabica Supply Remains More Constrained Than Global Headlines Suggest

Although global production is expected to rise, extremely low ICE arabica inventories indicate that the physical market does not have unlimited immediately deliverable supply.

6. Potential Divergence Between Arabica and Robusta

The historically low arabica inventory situation contrasts with rising robusta stocks, creating the potential for different price responses between the two coffee varieties.

Bearish Sentiment

1. Global Coffee Surplus

The ICO expects a 3 million-bag global surplus for 2025/26, the first surplus in five years.

2. Record Global Production

The ICO estimates 2025/26 production at a record 183.6 million bags, while the USDA expects production to rise further to 189.7 million bags in 2026/27.

3. Brazil Export Growth

Brazilian coffee exports surged 31% year-over-year in August, reaching a record for the month and increasing physical availability.

4. Strong Vietnamese Supply

Vietnam’s January-August coffee exports increased 13.7%, while 2025/26 production is expected to reach a four-year high.

5. Rising Robusta Inventories

ICE robusta stocks have climbed to a 9.5-month high of 5,043 lots, reinforcing the bearish supply outlook for robusta.

6. Higher Global Ending Stocks

The USDA expects global ending stocks to increase by 1.9 million bags to 26.3 million bags in 2026/27.

7. Beneficial Brazilian Rainfall

Rainfall in Minas Gerais reached 242% of the historical average during the latest reported week, potentially supporting the next Brazilian crop.

Coffee Price Forecast: What Traders Are Watching

The coffee market is currently facing a significant shift in its fundamental balance.

The bearish argument is straightforward: global production is increasing, the ICO expects a surplus, the USDA forecasts another record crop, Brazilian exports are surging and Vietnamese supplies are improving.

However, the market is not completely bearish.

Arabica inventories remain exceptionally low, and the possibility of El Niño disrupting Brazilian flowering provides a significant medium-term risk. If Brazilian rainfall deteriorates during the critical September-October period, expectations for a record 2026/27 crop could be revised lower.

The next major directional move is therefore likely to depend heavily on Brazilian weather, flowering conditions, export flows and certified inventories.

For robusta, the supply picture is currently more comfortable because Vietnamese exports are increasing and ICE inventories are rising.

Coffee Supply Outlook

The global supply outlook is currently expanding.

Brazil is approaching the end of its harvest with substantial coffee moving into export channels, while Vietnam is reporting stronger exports and higher production expectations.

The USDA’s projection for 189.7 million bags of global production in 2026/27 reinforces the expectation of abundant supply.

However, the Brazilian crop remains highly weather-dependent. The current beneficial rainfall pattern is supportive, but any significant change during flowering could quickly alter the production outlook.

The supply story therefore remains strongly influenced by weather rather than production estimates alone.

Coffee Demand Outlook

The return of a global surplus suggests that production is currently outpacing consumption.

The ICO expects 2025/26 consumption to fall 0.9% to 180.6 million bags, while production increases 4.4%.

This creates a potentially challenging environment for prices unless consumption strengthens or supply expectations are reduced.

The key question for the market is whether lower prices eventually stimulate consumption sufficiently to absorb the additional production.

If demand improves while arabica inventories remain historically low, the downside could become more limited. Conversely, continued weak consumption alongside record production would reinforce the bearish market structure.

Coffee Market Outlook for the Coming Sessions

Coffee is entering a period in which Brazilian weather will become increasingly important.

The immediate market narrative remains bearish because of record global production expectations, strong Brazilian exports, improving Vietnamese supply and rising robusta inventories.

Nevertheless, arabica’s historically low ICE stocks and the potential impact of El Niño prevent the supply outlook from being entirely one-directional.

For the coming sessions, traders are likely to focus on rainfall across Minas Gerais, Brazilian flowering conditions, export volumes and changes in ICE inventories.

A continuation of favourable Brazilian weather would reinforce expectations for a large 2026/27 crop and could maintain pressure on prices. A deterioration in rainfall or evidence of flowering stress could revive the weather-risk premium.

Currency Hedger View

Coffee importers, roasters and international businesses face exposure not only to coffee prices but also to the currency in which those purchases are settled.

With coffee predominantly traded internationally in US dollars, movements in the dollar can change the effective cost of coffee for businesses operating in euro, sterling and other currencies.

Currency Hedger provides managed FX services for business and personal clients, helping clients manage international currency requirements alongside their broader financial planning.

For businesses purchasing coffee internationally, managing currency exposure can provide greater visibility over landed costs when commodity prices and exchange rates are both volatile.

Today Markets View

Coffee prices have entered a more supply-driven phase, with both arabica and robusta falling to three-month lows as traders respond to expectations for abundant global production.

The bearish case is supported by the ICO’s projected 3 million-bag surplus, the USDA’s forecast for 189.7 million bags of global production in 2026/27, strong Brazilian exports, rising Vietnamese supply and increasing robusta inventories.

At the same time, arabica inventories remain historically low, while El Niño introduces a potentially significant weather risk to Brazil’s next crop.

Bullish sentiment is therefore concentrated around low arabica stocks and future weather risks, while bearish sentiment is dominated by expanding production and improving physical availability.

The next major catalyst is likely to come from Brazil. Continued favourable rainfall during flowering would strengthen the record-crop narrative, while a deterioration in weather could force traders to reassess current 2026/27 production expectations.

Louis Roche, Analyst, Today Markets

Disclaimer: Today Markets is a division of Octalas Group Ltd. The information provided is for general market commentary and educational purposes only and does not constitute investment, financial, trading or other professional advice. Market prices can move rapidly and past performance is not indicative of future results. Currency Hedger is a division of Octalas Group Ltd and provides information relating to foreign exchange and currency management services. Readers should conduct their own research and seek independent professional advice where appropriate.