Contributor: Currency Hedger
Market Analysis: Louis Roche, Today Markets
Coffee futures advanced in the latest session as lower production and exports from Colombia added support to arabica prices, while concerns over a possible El Niño weather pattern raised uncertainty about Brazil’s next crop. December New York arabica coffee rose 1.27%, while November London robusta gained 0.23%.
The market faces competing supply signals. Colombia’s coffee production and exports declined in the 2025/26 season, and historically low ICE arabica inventories provide an additional source of support. However, higher Brazilian exports, improved growing conditions in Brazil and Vietnam, and forecasts for record global coffee production could limit the potential for a sustained rally.
The outlook for the coming sessions will depend on whether supply disruptions outweigh expectations of a larger global crop. Arabica and robusta may also diverge, as their production patterns and exchange inventory trends remain different.
Market Snapshot
| Market indicator | Latest supplied data |
|---|---|
| December New York arabica coffee | +1.27% |
| November London robusta coffee | +0.23% |
| Colombia 2025/26 coffee production | 12.65 million bags, down 15% |
| Colombia 2025/26 coffee exports | 11.78 million bags, down 12% |
| Brazil September coffee exports | 236,000 tonnes, up over 20% |
| ICO 2025/26 global production forecast | 183.6 million bags |
| ICO 2025/26 global surplus estimate | 3 million bags |
| USDA 2026/27 global production forecast | 189.7 million bags |
| ICE arabica inventories | Recovered from a 27-year low |
| ICE robusta inventories | Recently eased from a September high |
| Near-term market bias | Mixed, with arabica supported by supply risks |
Figures are based on the supplied market report. Production estimates differ by organisation and reporting period.
1. Colombia’s Lower Output Supports Arabica Prices
Colombia’s coffee sector is providing an important source of support for arabica futures. The country’s Coffee Federation reported that production fell 15% year on year to 12.65 million bags in the 2025/26 season, while exports declined 12% to 11.78 million bags.
Lower production and export availability can tighten the supply of Colombian coffee, particularly when buyers are seeking consistent quality and reliable deliveries. Colombia is one of the world’s leading arabica producers, so a sustained decline can influence market sentiment even when production elsewhere remains strong.
The latest figures also highlight the importance of monitoring export flows alongside headline crop estimates. If Colombian shipments remain subdued, buyers may need to source more coffee from other origins, potentially supporting prices for competing arabica supplies.
However, Colombia’s weaker output must be considered alongside Brazil’s much larger production base. Higher Brazilian exports and expectations for an improved crop could offset some of the supply pressure from Colombia.
For the coming sessions, further evidence of reduced Colombian availability would support arabica, while a recovery in shipments or stronger Brazilian supply could limit gains.
2. Brazil’s Larger Crop Outlook Creates Downside Risk
Brazil remains the central variable in the global coffee outlook. The country is the largest coffee producer, and changes in its harvest estimates can have a substantial effect on international prices.
Brazil’s Trade Ministry reportedly recorded a year-on-year increase of more than 20% in September coffee exports, reaching 236,000 tonnes. Strong shipments suggest that export availability has improved, creating a counterweight to concerns over lower production in Colombia.
Crop forecasts also point towards greater Brazilian supply. Conab raised its 2026 production estimate to 67.6 million bags from 66.7 million bags. Its outlook anticipates a substantial recovery in arabica production, while robusta output is expected to decline.
The USDA’s Foreign Agricultural Service has also projected a record Brazilian crop for 2026/27, while the USDA’s broader global forecast points to increased production as growing conditions improve.
These forecasts create a bearish risk for coffee prices if the expected crop recovery materialises. Larger production could rebuild inventories, improve export availability and reduce the urgency among buyers to secure supplies.
Nevertheless, forecast production is not the same as confirmed output. Weather during flowering, fruit development and harvesting can alter final yields. Any sustained deterioration in growing conditions would require the market to reassess the current expectation of abundant Brazilian supplies.
3. El Niño Raises Uncertainty for the Next Brazilian Crop
The possibility of a strong El Niño is adding uncertainty to Brazil’s production outlook. Coffee trader assessments have raised concerns that the weather pattern could disrupt the timing of rainfall during the flowering period, potentially affecting the 2026/27 crop.
The impact is not straightforward. Insufficient rainfall at critical stages can impair flowering and reduce yields, while well-timed rainfall can support tree development and improve the eventual harvest. The timing, regional distribution and intensity of precipitation are therefore more important than the broad weather pattern alone.
Recent rainfall in Minas Gerais, Brazil’s principal arabica-growing region, has been reported around its historical average. That provides a more constructive signal for crop development than a severe drought scenario would, although it does not guarantee a strong harvest.
The market is likely to remain sensitive to forecasts as the crop develops. If rainfall becomes irregular or adverse weather affects flowering and fruit formation, coffee could regain a weather premium. If conditions remain favourable, expectations of a larger Brazilian crop may continue to weigh on prices.
4. Vietnam’s Robust a Supply Outlook Limits Price Strength
Vietnam, the world’s largest robusta producer, is a key influence on London robusta futures. The supplied figures indicate that Vietnamese coffee exports increased 53% year on year in September to 124,000 tonnes, while exports for January to September rose 16.2% to 1.45 million tonnes.
Vietnam’s 2025 coffee exports also increased, and the country’s 2025/26 production is projected to rise to a four-year high. Improved rainfall and soil moisture in the Central Highlands could support cherry development and reinforce expectations of greater availability.
This creates a more challenging backdrop for robusta than for arabica. Strong export flows and improving crop prospects could reduce the need for buyers to compete aggressively for supplies, particularly if inventories remain comfortable.
The main risk to this outlook is a deterioration in weather conditions or a disruption to exports. If the next crop underperforms, or if shipments slow materially, robusta prices could recover.
For now, the supply outlook from Vietnam is a significant constraint on upside potential, even as broader coffee markets receive support from concerns about weather and production elsewhere.
5. Global Coffee Production Forecasts Point to a Potential Surplus
The International Coffee Organization has projected 2025/26 global coffee production at a record 183.6 million bags, an increase of 4.4% year on year. With consumption forecast to decline 0.9% to 180.6 million bags, the organisation estimates a surplus of approximately three million bags.
That would represent a shift from the deficits seen in recent years and could ease pressure on the global supply chain if the forecasts are confirmed.
The USDA’s outlook is also bearish for prices. It expects global coffee production to increase to a record 189.7 million bags in 2026/27, with higher arabica production more than offsetting the projected small decline in robusta output. World ending stocks are forecast to rise to 26.3 million bags.
These projections suggest that the broader supply balance could become more comfortable. However, forecasts from different organisations use different methodologies and assumptions, so their figures should not be combined as if they were a single estimate.
The market will need to see whether the expected production increase translates into actual exports and higher available stocks. A larger crop accompanied by stronger consumption could have a more limited price impact than a production increase that substantially exceeds demand.
6. Arabica and Robusta Inventories Signal Different Market Conditions
Exchange inventories remain an important distinction between the two coffee markets.
ICE arabica stocks fell to a reported 27-year low of 217,646 bags in September before recovering to 260,654 bags later in the month. Although the recovery has eased some immediate concerns, the inventory level remains an important indicator to monitor.
Low arabica stocks can make the market more sensitive to unexpected supply disruptions, particularly if Colombia’s lower output persists or the next Brazilian crop encounters problems.
Robusta inventories have followed a different pattern. ICE robusta stocks reached a reported 10.5-month high in September before declining to a recent multi-week low. The decline offers some support, but it does not by itself establish a lasting tightening in robusta availability.
If arabica inventories begin falling again while robusta stocks remain comparatively comfortable, the two contracts could develop different price trends. Conversely, sustained inventory rebuilding across both markets would strengthen the argument that global supply is becoming more abundant.
Technical Outlook: Coffee Futures
The latest session shows modest gains in both arabica and robusta, but the fundamental outlook remains divided. Arabica has additional support from lower Colombian output and relatively tight exchange inventories, while robusta faces greater pressure from Vietnamese export growth and improving supply prospects.
The supplied data do not establish verified current support and resistance levels. The technical outlook should therefore focus on whether the latest gains attract further buying and whether prices can hold those advances as new production and export data emerge.
Bullish scenario
Coffee prices could extend their recovery if Colombia’s production and exports remain weak, weather forecasts become less favourable for Brazil, or inventory data show renewed tightening. A deterioration in flowering or crop development would be particularly supportive if it undermines expectations of record global output.
Bearish scenario
Prices could retreat if Brazilian production forecasts continue to rise, Vietnamese exports remain strong and global output moves towards the projected record. A sustained recovery in exchange inventories would add to the downside risk, particularly if demand remains subdued.
Neutral scenario
Coffee may consolidate as traders balance lower Colombian availability against stronger Brazilian and Vietnamese supply. Arabica could outperform robusta if inventory constraints remain more pronounced in the arabica market, while robusta remains capped by the larger Vietnamese crop outlook.
Coffee Price Forecast: Outlook for the Coming Sessions
The near-term outlook is mixed, with arabica relatively better supported by Colombian supply concerns and low historical inventory levels, while robusta faces greater pressure from Vietnamese production and export growth.
For arabica, the immediate focus will be on Colombia’s export performance, Brazilian rainfall and any changes to the next crop estimate. Further evidence of reduced availability could sustain buying interest, particularly if exchange inventories begin to decline again.
For robusta, traders will be watching whether Vietnam’s improved growing conditions translate into a larger harvest and continued export growth. If supply increases as expected, rallies may struggle to develop into a sustained upward trend.
The broader market will also respond to revisions in global production and consumption forecasts. Record output and a projected surplus would normally weigh on prices, but adverse weather or logistical disruptions could quickly alter that balance.
Over the coming sessions, coffee prices are likely to remain sensitive to weather updates, export data and inventory movements. A durable rally would require clearer evidence that supply risks are outweighing the prospect of a larger global crop. Until then, price direction may vary between arabica and robusta.
Analysis — Louis Roche, Today Markets
Coffee is caught between immediate supply concerns and a potentially more comfortable global balance. Colombia’s lower production and exports provide a supportive signal for arabica, while the possibility of adverse weather in Brazil introduces uncertainty into the next crop cycle.
However, stronger Brazilian exports, improving Vietnamese growing conditions and forecasts for record global production argue against assuming that the recent gains will develop into a sustained rally. The inventory picture also differs between arabica and robusta, making it important to assess each market separately.
The key question for the coming sessions is whether supply risks begin to undermine expectations of abundant production. Until crop forecasts, export flows and inventory trends provide clearer confirmation, coffee is likely to remain volatile, with arabica potentially better supported than robusta.
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Disclaimer: This material is for informational and educational purposes only and does not constitute investment advice, financial advice or a recommendation to buy or sell any financial instrument or commodity. Coffee futures can be volatile and involve substantial risk. Production forecasts, inventory figures and market estimates may be revised, and actual outcomes may differ materially from expectations.
