Global Coffee Market Summary

• Brazil's 2026 coffee crop is forecast by Conab at 67.6 million bags, up 19.6% year on year, driven by a 34.8% increase in Arabica production to 48.21 million bags. However, heavy rainfall has damaged drying conditions, leaving only 10-15% of the crop meeting exchange-grade standards, compared with a historical 30-35%. Exchange-grade premiums have risen to 15 cents per pound over futures. September green coffee shipments increased more than 20% year on year to approximately 3.9 million bags, while domestic consumption is also strengthening and industry stocks have fallen to just four to seven weeks of supply.
• Colombia faces a tighter outlook, with production forecast to fall 15% to 12.65 million bags and exports down 12% to 11.78 million bags. Earthquake-related disruption in major producing regions has added uncertainty, although no significant damage to milling facilities was reported. In Vietnam, Robusta output is expected to rise 6% to a four-year high of 29.4 million bags, while September exports surged 53%. However, disagreements over prices are delaying new-crop sales, and potential El Niño-related drought poses a risk to the 2027/28 harvest.
• Weather remains a concern in Indonesia and Ethiopia. Below-average rainfall in southern Sumatra could affect flowering for Indonesia's next main crop, while deficient rainfall in parts of Ethiopia could reduce bean size and density. These risks may limit quality and future supply even where current harvesting conditions remain favorable.
• The International Coffee Organization forecasts record global production of 183.6 million bags for 2025/26, exceeding consumption and creating the first surplus in five years. ICE Arabica stocks have recovered slightly from a 27-year low, while Robusta inventories have reached a one-year high. Despite this broader bearish supply outlook, December Arabica futures rose 6.5% during the week, trading near 316 cents per pound. Overall sentiment remains neutral to cautiously bullish in the near term, as immediate Arabica quality shortages and regional supply risks offset expectations of a larger global surplus.

Global Coffee Market Summary

• Brazil’s 2026 production forecast is rising, with Conab projecting 67.6 million bags, including 48.21 million bags of Arabica, up 34.8%. Exports increased 20% year on year in September, forcing farmers to release stocks as warehouses fill. Despite favorable flowering conditions in parts of Minas Gerais, the threat of El Niño-related rainfall delays remains significant. Excessive rain in Espírito Santo could also cause uneven flowering and fungal problems. Post-harvest rehumidification is creating additional quality concerns, while worsening coffee-to-fertilizer exchange ratios are squeezing producer economics.
• Vietnam is expected to increase production, but export performance remains mixed. Efforts to improve export value through deeper processing face capital constraints, while compliance with the European Union’s deforestation regulation remains a challenge. Forecast rainfall could also increase harvest risks. In Colombia, production is declining, with an earthquake disrupting key growing regions, although limited damage to milling facilities has reduced the risk of broader supply-chain disruption.
• Indonesia faces severe drought, particularly in southern Sumatra, threatening to delay flowering and creating uncertainty around Robusta supply and premiums. Ethiopia’s harvest is beginning under moderate risk, as reduced rainfall during cherry development could produce smaller, less dense beans. Drier conditions are nevertheless supporting picking and drying operations.
• Globally, the International Coffee Organization anticipates a supply surplus as production increases, particularly for Arabica, despite tight inventories. A stronger Brazilian real is limiting farmer selling, while market expectations continue to favor lower prices. Traders may interpret price rebounds as short-covering opportunities rather than evidence of a sustained recovery.

Global Coffee Market Summary

• Brazil's 2026 production estimate has been raised to 67.6 million bags by CONAB, including a 34.8% increase in Arabica output to 48.21 million bags. USDA FAS and StoneX project an even larger crop of up to 77.2 million bags. Green coffee exports rose more than 20% year on year in September, although limited exchange-grade quality is supporting market premiums. High fertilizer costs are also squeezing producer margins and limiting investment.
• Colombia remains a source of support for Arabica prices, with production down 15% to 12.65 million bags and exports declining 12% year on year. In Vietnam, robusta exports surged 53% in September, although lower average prices reduced export value. Firm farm-gate prices, weather risks and expectations of lower production in the next season could constrain future supply.
• Indonesia faces insufficient rainfall in southern Sumatra, threatening flowering and next year's harvest. In Ethiopia, inadequate rainfall and above-normal temperatures could affect coffee cherry quality and export volumes as harvesting begins.
• Globally, coffee production is projected to reach record levels, with a surplus expected for the first time in five years. Despite regional supply risks and price premiums for quality beans, the broader market sentiment remains cautiously bearish. Production estimates, export flows, weather conditions and futures positioning will remain key drivers of price direction.