**Coffee Prices Decline Amid Surplus Projections**
On September 10, the International Coffee Organization (ICO) announced that global coffee production for the 2025/26 season is projected to rise 4.4% year-on-year to a record 183.6 million bags, with consumption expected to decline 0.9% to 180.6 million bags. This situation results in a surplus of 3 million bags, the first in five years. Currently, December arabica coffee prices have fallen by 1.55% to $4.35, reaching a three-month low, while November robusta coffee prices declined by 1.88% to $64.
Brazil has experienced beneficial growing conditions, with excessive rainfall reported at 242% of the historical average in Minas Gerais during the week ending September 20. Brazil’s coffee exports in August surged by 31% year-on-year, totaling 4.155 million bags, contributing to greater global supplies. Additionally, Vietnam’s coffee exports increased by 13.7% in the first eight months of 2023, further pressuring robusta prices.
Despite rising inventories for robusta, which hit a 9.5-month high, inventories for arabica fell to a 27-year low before recovering. Concerns regarding an impending El Niño weather pattern may impact Brazil’s coffee production in the 2026/27 season, creating potential bullish conditions for prices. The USDA has also forecast a 6% increase in global coffee output for the 2026-27 season, indicating continued challenges for coffee prices.
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