**Coffee Prices Decline Amid Surplus Forecasts**
On Thursday, December arabica coffee (KCZ26) fell by 1.79% to close at a 2.5-month low, while November ICE robusta coffee (RMX26) decreased by 1.14%. The International Coffee Organization projects a record global coffee crop of 183.6 million bags for the 2025/26 season, up 4.4% year-on-year, and a surplus of 3 million bags, the first such surplus in five years.
Brazil’s coffee exports surged 31% year-on-year to 4.155 million bags in August, contributing to the global supply increase. The country’s beneficial growing conditions, including significant rainfall of 59.4 mm in Minas Gerais, the main arabica region, further support production forecasts. Additionally, Vietnam’s coffee exports rose by 13.7% for the 2026 period, bolstering global inventories. Conversely, ICE arabica inventories have fallen to a 27-year low of 217,646 bags.
Concerns over the potential impact of the El Niño weather pattern, which could adversely affect Brazil’s coffee crop, add volatility to prices. The USDA has also forecast a record coffee production of 189.7 million bags for the 2026/27 season, primarily due to favorable conditions in Brazil.
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