Coffee prices remain under pressure after falling toward three-month lows as improving global supply prospects continue to outweigh support from historically low arabica inventories.
December ICE Arabica coffee is around $3.80 per pound, while November ICE Robusta is trading near $2,800 per metric ton. The latest weakness follows an upward revision to Brazil’s 2026 coffee crop forecast, reinforcing expectations that global availability will remain strong.
Brazil’s crop agency Conab now estimates 2026 coffee production at 67.6 million bags, up from 66.7 million previously. Arabica production is projected to rise sharply, while robusta output is expected to decline. At the same time, Brazil’s export flows are reaching record levels as the harvest progresses through its final stages.
The supply picture is therefore becoming increasingly important. Record global production forecasts, improving Brazilian and Vietnamese growing conditions and strong exports are creating a bearish backdrop, although extremely low ICE arabica inventories and potential El Niño disruption remain important upside risks.
Market Snapshot
| Factor | Current Market Signal |
|---|---|
| December Arabica Coffee | Around $3.80/lb |
| November Robusta Coffee | Around $2,800/MT |
| Brazil 2026 Crop | 67.6 million bags |
| Brazil 2026 Arabica | 48.21 million bags, +34.8% y/y |
| Brazil 2026 Robusta | 19.39 million bags, -6.6% y/y |
| Global 2025/26 Production | 183.6 million bags |
| Global 2025/26 Balance | Approximately 3 million-bag surplus |
| Global 2026/27 USDA Production Forecast | 189.7 million bags |
| ICE Arabica Stocks | Around 258,000 bags after recent recovery |
| ICE Robusta Stocks | Around 5,398 lots, 10-month high |
| Key Risk | Brazil/Vietnam supply versus weather and inventory constraints |
Current Coffee Price Action
Coffee prices are consolidating below recent highs after reaching three-month lows as traders increasingly price a more comfortable global supply outlook.
The latest pressure comes from Brazil’s higher 2026 production estimate. The increase reinforces expectations that the world’s largest coffee producer can provide substantial additional supply to international markets.
Currency movements are also influencing the market. The Brazilian real has weakened to a multi-week low against the US dollar, improving the economics of dollar-denominated coffee exports for Brazilian producers and potentially encouraging additional selling.
Robusta has an additional supply-related headwind from rising exchange inventories, while arabica continues to receive some support from exceptionally low certified stocks.
Brazil Raises 2026 Coffee Production Forecast
Brazil remains the dominant supply variable for the global coffee market.
Conab now estimates total 2026 production at 67.6 million bags, compared with its previous estimate of 66.7 million.
The composition of the crop is particularly important. Arabica production is expected to reach approximately 48.21 million bags, representing an increase of 34.8% from the previous year.
Robusta production is projected at approximately 19.39 million bags, down 6.6% year-on-year.
The large increase in arabica production is especially relevant to New York coffee futures because Brazil is the world’s largest arabica producer. If the larger crop estimate translates into sustained export availability, it could keep pressure on arabica prices.
Brazil’s Record Export Flow Adds Global Supply
Brazilian coffee is increasingly reaching international buyers as the current harvest progresses toward completion.
Brazil exported approximately 4.155 million bags of coffee in August, a record for the month and 31% above the previous year.
Arabica exports increased 26% to approximately 2.87 million bags, while robusta exports jumped 54% to around 954,000 bags.
Separate trade data also points to a substantial increase in Brazilian coffee exports, reinforcing the view that additional physical supply is reaching the international market.
For futures traders, this creates an important near-term bearish factor: even if longer-term production risks remain, the current flow of Brazilian coffee can keep nearby supply comfortable.
Brazil Weather Supports the Next Crop
Weather conditions are currently providing another bearish influence.
Rainfall across Minas Gerais, Brazil’s principal arabica-growing region, has been significantly above historical averages. Approximately 33.4 mm of rain was recorded during the latest reported week, equivalent to 242% of the historical average.
The rainfall is occurring during a critical flowering period and could support the development of the 2026/27 crop.
However, the weather outlook remains two-sided. An emerging El Niño pattern could disrupt the timing and distribution of rainfall later in the season, creating renewed production risk if conditions become excessively dry or volatile.
Vietnam Supply Outlook Pressures Robusta
Vietnam is providing another source of supply pressure, particularly for robusta.
Vietnamese coffee exports during the first eight months of 2026 increased 13.7% year-on-year to approximately 1.33 million metric tons.
The country’s 2025 coffee exports also increased strongly, while 2025/26 production is projected at approximately 1.76 million metric tons, representing a four-year high.
Improved rainfall across Vietnam’s Central Highlands is supporting soil moisture and cherry development, creating a more constructive production outlook for the world’s largest robusta-producing country.
Coffee Inventories Show a Major Arabica-Robusta Divide
Exchange inventories are sending different signals across the two coffee markets.
ICE arabica inventories remain historically low. Stocks recently fell to approximately 217,646 bags, the lowest level in 27 years, before recovering toward 258,415 bags.
This exceptionally low inventory base provides underlying support to New York coffee and limits the extent to which supply growth can immediately eliminate physical tightness.
Robusta presents the opposite picture. ICE robusta inventories have climbed to approximately 5,398 lots, the highest level in around ten months.
The divergence means arabica and robusta can respond differently to the same global supply developments.
Global Coffee Supply Moves Toward Record Levels
The broader production outlook remains bearish.
The International Coffee Organization estimates 2025/26 global production at a record 183.6 million bags, up 4.4% year-on-year.
Consumption is estimated at approximately 180.6 million bags, down 0.9% year-on-year, creating a global surplus of around 3 million bags.
This would represent the first global surplus in approximately five years.
Looking further ahead, the USDA projects 2026/27 global production at a new record of approximately 189.7 million bags, an increase of 6% year-on-year.
The USDA also expects global arabica production to rise around 12%, although robusta production is forecast to decline slightly.
World ending stocks are projected to increase by approximately 1.9 million bags to 26.3 million bags.
El Niño Remains a Key Weather Risk
The emerging El Niño pattern provides an important counterweight to the expanding supply outlook.
If El Niño produces delayed or insufficient rainfall in Brazil during critical flowering periods, the 2026/27 crop could face renewed production risks.
The same weather pattern could create disruption across coffee-producing regions in Asia and South America through periods of excessive rainfall, drought or abnormal temperatures.
The market therefore has to balance currently favourable growing conditions against the possibility that weather conditions become less supportive later in the crop cycle.
Bullish Sentiment
- Extremely low arabica inventories: ICE arabica stocks remain near historically depressed levels, limiting nearby physical availability.
- El Niño risk: Potential disruptions to Brazilian rainfall could damage flowering and reduce 2026/27 production potential.
- Arabica supply concentration: Brazil’s importance to global arabica production means any significant weather disruption could have an outsized impact on the market.
- Strong physical demand in some regions: Despite the projected global surplus, coffee consumption remains substantial and can absorb additional supply if prices become more competitive.
- Weather uncertainty: Current favourable conditions cannot guarantee a successful 2026/27 harvest, particularly with a potentially strong El Niño developing.
Bearish Sentiment
- Higher Brazilian crop forecast: Conab has raised its 2026 production estimate to 67.6 million bags.
- Sharp arabica production growth: Brazil’s 2026 arabica crop is projected at 48.21 million bags, up 34.8% year-on-year.
- Record Brazilian exports: August exports reached a record 4.155 million bags, increasing global availability.
- Vietnam supply growth: Higher exports and improved growing conditions are strengthening the robusta supply outlook.
- Rising robusta inventories: ICE robusta stocks have reached a ten-month high, reinforcing pressure on London futures.
- Global surplus: The ICO’s 2025/26 balance points to a surplus of around 3 million bags, while USDA forecasts another record production year in 2026/27.
- Favourable Brazilian rainfall: Above-normal rainfall during the flowering period is supporting expectations for the next crop.
Price Forecast: What Traders Are Watching
The key issue for coffee is whether expanding production can overcome the physical tightness still visible in arabica inventories.
A continuation of favourable Brazilian weather, strong exports and rising global production expectations would keep the pressure on futures. Further evidence of abundant Vietnamese supply would be particularly negative for robusta.
The bullish scenario would require a deterioration in Brazilian weather, stronger evidence of El Niño disruption or renewed declines in already-low arabica inventories.
The next major directional signal is therefore likely to come from Brazilian weather and export flows versus ICE inventory movements.
Supply Outlook
The immediate supply outlook is becoming more comfortable.
Brazil’s larger production forecast, record export pace and favourable rainfall are increasing expectations for substantial availability. Vietnam is also contributing to the robusta supply outlook through higher exports and improving crop conditions.
However, the longer-term picture remains vulnerable to weather. El Niño could alter rainfall patterns across Brazil and other producing regions, potentially reducing production estimates later in the crop cycle.
Demand Outlook
Coffee demand is facing a more mixed environment.
The ICO’s projected 2025/26 consumption decline is consistent with the possibility that high prices have encouraged some demand destruction. At the same time, global consumption remains close to record levels and can respond positively if prices decline.
The key demand question is whether lower prices stimulate consumption enough to absorb the additional production expected from Brazil and other major producers.
Market Outlook for the Coming Sessions
Coffee is likely to remain highly sensitive to Brazilian supply data, currency movements and weather forecasts.
A weaker Brazilian real could continue encouraging producer selling, while strong export volumes would reinforce the bearish supply narrative. Rising robusta inventories provide an additional headwind for London coffee.
New York arabica has a different underlying structure because of exceptionally low certified inventories. Any renewed decline in ICE stocks could provide support even while global production expectations remain high.
For the coming sessions, traders will be watching Brazilian export flows, Minas Gerais rainfall, Vietnam crop conditions, ICE inventories and developments in the El Niño pattern.
Currency Hedger View
Coffee is a globally traded commodity with significant currency exposure for producers, exporters, roasters and international buyers.
The Brazilian real is particularly important because Brazil is the world’s largest coffee producer. A weaker real can improve the local-currency returns received by Brazilian exporters and may encourage additional coffee selling into international markets.
For international buyers, movements in the US dollar can simultaneously affect the dollar price of coffee and the local-currency cost of procurement. This makes FX management an important consideration when commodity prices are already volatile.
Businesses purchasing or selling coffee across multiple currencies can benefit from managing the commodity exposure and currency exposure as separate but connected components of their overall risk strategy.
For international FX, payment and currency-management solutions, visit Currency Hedger.
Analysis Louis Roche – Today Markets
Coffee remains under pressure because the global supply outlook is becoming increasingly comfortable, particularly as Brazil moves more of its current crop into export markets.
The increase in Conab’s Brazilian production forecast reinforces the supply story, while record August exports and favourable rainfall across Minas Gerais provide additional evidence that Brazil can deliver substantial volumes into the international market.
Vietnam is also adding to the pressure on robusta through higher exports, improving soil moisture and stronger production expectations. Rising ICE robusta inventories further reinforce that trend.
However, the arabica market retains an important source of support through exceptionally low certified inventories. The difference between historically low arabica stocks and rapidly increasing Brazilian production will be critical in determining whether New York coffee can stabilise.
Beyond the immediate supply picture, El Niño remains the principal weather risk. If the developing pattern produces delayed rainfall or adverse conditions during key flowering and development periods, current production expectations could change quickly.
For now, the market is being driven by abundant expected supply versus tight arabica inventories and future weather risk. The coming sessions should provide further clues as to whether expanding Brazilian availability is sufficient to keep prices under sustained pressure.
Louis Roche – Today Markets
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