December arabica coffee (KCZ26) is down -1.80 (-0.63%) today, and November ICE robusta coffee (RMX26) is down -40 (-1.15%).
Coffee prices extended their three-week-long decline today, with arabica falling to a 2.5-month low. Coffee prices have been under pressure over the past three weeks on the outlook for abundant global supplies. Last Thursday, the International Coffee Organization (ICO) projected a record global coffee crop and a surplus. ICO said 2025/26 global coffee production rose +4.4% y/y to a record 183.6 million bags and consumption fell -0.9% y/y to 180.6 million bags, leaving the global coffee market in a 3 million bag surplus, the first surplus in five years.
Beneficial growing conditions in Brazil and Vietnam are also weighing on coffee prices. Above-normal rainfall in Brazil during the now critical flowering stage may benefit next year’s 2026/27 coffee harvest, a bearish factor for prices. On Monday, Somar Meteorologia reported that 59.4 mm of rain, or 1,212% of the historical average, fell in the week ended September 13 in Brazil’s Minas Gerais, the country’s main arabica-coffee growing region. In Vietnam, forecaster Vaisala said abundant rains have improved soil moisture levels and should aid cherry development in Vietnam’s Central Highlands, the country’s largest coffee-producing region.
Brazil’s coffee is hitting the export markets as Brazil’s harvest wraps up, adding to global supplies ad undercutting prices. Last Thursday, Cecafe reported that Brazil’s total coffee exports in August rose +31% y/y to 4.155 million bags, a record high for the month of August. August arabica exports rose +26% to 2.87 million bags, while robusta exports rose +54% to 953,592 bags. Separately, Brazil’s Trade Ministry reported last Tuesday that Brazil’s Aug coffee exports rose +44.6% y/y to 206,618 MMT, the most in 8 months.
On September 3, robusta fell to a 3-month low on signs of bigger coffee supplies from Vietnam, the world’s largest producer of robusta coffee. Vietnam’s National Statistics Office reported last Wednesday that Vietnam’s 2026 coffee exports (Jan-Aug) rose by +13.7% y/y to 1.33 MMT. Vietnam’s 2025 coffee exports jumped by +17.5% y/y to 1.58 MMT. Also, Vietnam’s 2025/26 coffee production is projected to climb +6% y/y to a 4-year high of 1.76 MMT (29.4 million bags).
Falling inventories are bullish for arabica coffee prices, as ICE arabica coffee inventories fell to a 27-year low of 217,646 bags on Tuesday. By contrast, rising inventories are bearish for robusta coffee as ICE robusta inventories climbed to a 9.5-month high of 5,043 lots on Monday.
Concerns that an El Niño weather pattern could hurt Brazil’s coffee crop next year are bullish for prices. Coffee trader Commercial said the El Niño weather pattern may delay rains in Brazil this September and October, when tree flowering normally occurs, hurting Brazil’s 2026/27 coffee crop. On July 8, the US Climate Prediction Center said the El Niño weather pattern that emerged across the equatorial Pacific last month will likely be one of the strongest in more than 75 years. This sets the stage for months of possible floods, droughts, and temperature fluctuations later this year that could hinder coffee production in Asia and South America.
The latest USDA biannual forecast was bearish for coffee prices. On July 22, the USDA forecast that global coffee output in the 2026-27 season will rise by +6.0% (10.8 million bags) to a record 189.7 million bags, mainly due to improved growing conditions in Brazil. The USDA expects global arabica production to rise +12% y/y, although robusta production is expected to fall by -0.7% y/y. World ending stocks are expected to rise +1.9 million bags to 26.3 million bags. On June 3, the USDA’s Foreign Agricultural Service (FAS) forecast a record 2026/27 Brazil coffee crop of 71.9 million bags, up +14% y/y.
Rich Asplund
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