Coffee markets are showing diverging price movements as currency volatility in Brazil, rising global supply expectations and changing inventory levels influence arabica and robusta futures. December ICE New York arabica coffee fell 2.39%, while November ICE London robusta coffee advanced 1.44% in the latest reported session.

Arabica remains under pressure from concerns that Brazilian exporters will accelerate dollar-denominated sales following the sharp depreciation of the Brazilian real. At the same time, declining ICE arabica inventories are providing a counterweight to expectations of a larger global crop.

Robusta is receiving short-term support from a pause in the recent increase in ICE inventories, although strong Vietnamese exports and expectations for higher global coffee production remain significant bearish factors.

Looking ahead, traders are balancing near-term supply availability against the outlook for the 2026/27 harvest. Brazilian weather, Vietnamese production, currency movements and global inventory trends will remain central to price direction.

Market Snapshot

Market factor	Latest reported position
December ICE New York arabica	Down 2.39%
November ICE London robusta	Up 1.44%
ICE arabica inventories	224,822 bags
ICE arabica inventory trend	Lowest in approximately 1.5 months
ICE robusta inventories	2,607 lots in the latest reported figures
Brazil September coffee exports	236,000 MT, up more than 20% year-on-year
Brazil 2026 coffee production estimate	67.6 million bags
Vietnam September coffee exports	124,000 MT, up 53% year-on-year
Global 2025/26 production forecast	Record 183.6 million bags, according to the ICO
Global 2025/26 projected balance	Surplus of 3 million bags, according to the ICO
Key market drivers	Brazilian real, inventories, harvest weather, exports and global supply

Figures reflect the supplied market report and the reporting periods cited within it. The absolute futures settlement prices were not provided.

Current Coffee Price Action

Arabica and robusta are responding differently to the latest combination of currency and supply developments.

December ICE New York arabica futures declined by 7.20 cents to close down 2.39%. The weakness extends the previous session’s losses as traders assess the implications of a sharp fall in the Brazilian real.

The currency dropped 8.8% in the reported election-related move before recovering 1.3% in the following session. A weaker real can encourage Brazilian producers and exporters to sell coffee more aggressively because dollar-denominated export receipts translate into more local currency.

Robusta futures moved in the opposite direction, with November ICE London prices gaining 46 points, or 1.44%. The advance came as ICE robusta inventories stopped rising after a sharp increase over the preceding six weeks.

The divergent performance highlights the different short-term influences affecting the two markets. Arabica is dealing with currency-driven selling pressure and the prospect of additional certified stocks, while robusta has found some support from the pause in inventory accumulation.

However, neither move settles the broader direction of the coffee market. Expectations for a larger global harvest and rising export volumes remain important constraints on prices.

Brazilian Real and Export Selling Pressure

Brazil remains the most influential producer in the arabica market, making its currency a key factor in export-selling decisions.

The Brazilian real weakened sharply following the reported presidential election result, prompting concerns that exporters would increase sales. When the real depreciates against the US dollar, Brazilian sellers can receive more local currency for each dollar of export revenue, potentially making overseas sales more attractive.

The currency subsequently recovered part of its decline, but further fluctuations could continue to influence the pace of Brazilian coffee selling.

This relationship is particularly important when export availability is increasing. Brazil’s Trade Ministry reported that September coffee exports reached 236,000 metric tonnes, up more than 20% year-on-year.

If the combination of larger supplies and a weaker currency encourages additional sales, arabica prices could remain under pressure. A sustained recovery in the real, by contrast, could reduce the incentive for exporters to accelerate selling, although currency movements alone are unlikely to determine the market’s direction.

ICE Coffee Inventories: Arabica Tightness Versus Robusta Stabilisation

Exchange-monitored inventories are sending contrasting signals across the two coffee markets.

Arabica Inventories Approach Historic Lows

ICE arabica inventories declined by another 788 bags in the latest reported session to 224,822 bags, their lowest level in approximately one and a half months. Stocks are approaching the 27-year low of 217,646 bags recorded on September 15.

The low inventory level can provide underlying support because it indicates limited certified stocks available through the exchange system.

However, nearly 10,000 bags of coffee arrived at ICE warehouses for grading in the preceding session, the highest intake in more than a month. Some of this coffee could be added to certified inventories once grading is completed.

The market will therefore be watching whether the recent decline in arabica stocks continues or whether additional deliveries begin to rebuild available inventory. A sustained increase in certified stocks could weaken one of the market’s more supportive near-term factors.

Robusta Inventories Stop Rising

ICE robusta inventories increased sharply over the previous six weeks, reaching a reported 13-month high of 6,612 lots. The latest figures show stocks subsequently falling to 2,607 lots.

The pause in inventory growth helped support robusta futures, as traders assessed whether the recent increase was beginning to reverse.

A sustained decline in robusta inventories would provide further support. However, the market still faces the broader challenge of higher Vietnamese exports and expectations for increased global coffee availability.

The reported inventory figures should be monitored against subsequent exchange updates, as stock levels can change as deliveries, grading and warehouse movements are recorded.

Brazil’s 2026 Coffee Crop and Production Outlook

Brazil’s production outlook remains a major bearish influence on coffee prices, particularly for arabica.

On September 24, Brazil’s crop forecasting agency, Conab, raised its 2026 coffee production estimate to 67.6 million bags from 66.7 million bags.

The revised outlook includes expected arabica production of 48.21 million bags, an increase of 34.8% year-on-year. Robusta production, by contrast, is projected to fall 6.6% to 19.39 million bags.

This difference helps explain why the two coffee markets may respond differently to Brazilian supply developments. A substantial recovery in arabica production could increase availability and pressure prices, while lower robusta output may offer some offset to expanding supplies elsewhere.

Weather conditions remain important as Brazil moves through a critical stage of the crop cycle. Somar Meteorologia reported that Minas Gerais, the country’s principal arabica-growing region, received 29.6 millimetres of rainfall during the week ended October 25. This represented 82% of the historical average for the period.

The effect of this rainfall will depend on its distribution and the condition of the crop. More favourable moisture conditions during flowering can support future production, potentially increasing bearish pressure if the expected recovery in output is confirmed.

Vietnam Exports and Robusta Supply Pressure

Vietnam remains the world’s largest robusta producer, making its export performance a major influence on London futures.

Vietnam’s National Statistics Office reported that September coffee exports increased 53% year-on-year to 124,000 MT. Exports during January to September 2026 rose 16.2% to 1.45 million MT.

Vietnam’s full-year 2025 exports also increased 17.5% to 1.58 million MT, while production for the 2025/26 season is projected to rise 6% year-on-year to a four-year high of 1.76 MMT, equivalent to approximately 29.4 million bags.

These figures point towards a stronger supply pipeline. If export volumes remain elevated, additional Vietnamese coffee could limit the upside in robusta futures, particularly if inventories begin to rebuild.

Weather conditions provide a more uncertain signal. Forecaster Vaisala has reported that abundant recent rainfall improved soil moisture and should support cherry development in Vietnam’s Central Highlands, the country’s main coffee-growing region.

That development is potentially bearish because improved crop conditions can support output. However, longer-term weather risks remain relevant, particularly the possibility of El Niño-related drought later in the year and into early 2027.

El Niño Weather Risks Could Change the Supply Outlook

Despite favourable growing conditions in parts of Brazil and Vietnam, weather remains a key uncertainty for the next harvest.

Vietnam’s Agriculture Ministry warned that the Central Highlands could face drought linked to El Niño later this year and in early 2027. The same broader weather pattern could affect Brazil’s coffee-growing regions, although the actual impact will depend on its timing, intensity and regional distribution.

For coffee producers, inadequate rainfall during sensitive growth stages can reduce soil moisture, disrupt flowering and impair cherry development. The consequences may become more apparent as the crop progresses.

This creates a two-sided outlook for prices. Favourable rainfall and improving crop conditions could support the production recovery already reflected in forecasts, while a significant El Niño-related weather disruption could threaten yields and reverse some of the expected supply improvement.

Traders are likely to focus on updated rainfall assessments, crop development and any revisions to production estimates as the 2026/27 outlook becomes clearer.

Colombia’s Arabica Production Declines

Colombia, the world’s second-largest arabica producer, is providing a contrasting supply signal.

The Colombian Coffee Federation reported that production for the 2025/26 crop year fell 15% year-on-year to 12.65 million bags. Coffee exports declined 12% to 11.78 million bags.

Lower Colombian output and exports can provide support to arabica prices by limiting supplies from another major producer. However, the effect must be weighed against the expected recovery in Brazil, where the projected increase in arabica production is substantially larger.

If Colombia’s weaker production persists while Brazilian output disappoints, arabica supply conditions could tighten more than current forecasts suggest. Conversely, a strong Brazilian harvest could offset some of the shortfall from Colombia.

Global Coffee Balance: Record Production and Surplus Risks

The International Coffee Organization projected that global coffee production for 2025/26 would increase 4.4% year-on-year to a record 183.6 million bags. Consumption was forecast to fall 0.9% to 180.6 million bags, leaving a projected surplus of 3 million bags.

The projected surplus represents a significant bearish consideration because it suggests global production could exceed consumption after several years without a surplus.

The US Department of Agriculture’s July outlook was also bearish. It forecast that global coffee production in 2026/27 would rise 6%, or 10.8 million bags, to a record 189.7 million bags, supported mainly by improved Brazilian growing conditions.

The USDA expects global arabica production to rise 12% year-on-year, while robusta production is projected to decline 0.7%. Global ending stocks are forecast to increase by 1.9 million bags to 26.3 million bags.

The USDA’s Foreign Agricultural Service also projected a record Brazilian coffee crop of 71.9 million bags for 2026/27, up 14% year-on-year.

These forecasts are not identical to Conab’s Brazilian estimate, as they reflect different assessments and forecast periods. They should be treated as separate projections rather than interchangeable figures.

The central issue for prices is whether the expected increase in production materialises and whether consumption can absorb the additional supply. Any shortfall in Brazilian output or deterioration in Vietnamese crop conditions could narrow the anticipated surplus, while stronger-than-expected production would reinforce bearish sentiment.

Bullish Sentiment

1. Low arabica inventories: ICE arabica stocks have fallen to 224,822 bags, approaching the 27-year low recorded in September.
2. Potential inventory tightness: Continued declines in certified arabica stocks could increase sensitivity to supply disruptions, particularly if new warehouse deliveries fail to reverse the trend.
3. Colombian production weakness: A 15% year-on-year decline in 2025/26 production could constrain arabica availability from a major producing country.
4. Robusta inventory stabilisation: The recent pause in rising ICE robusta inventories has helped support London futures and could become more significant if stocks continue to decline.
5. El Niño risks: Potential drought conditions in Brazil and Vietnam could damage future crop development and undermine production forecasts.
6. Lower projected Brazilian robusta output: Conab’s estimate points to a 6.6% year-on-year decline in Brazil’s 2026 robusta production, which may partially offset stronger supply elsewhere.

Bearish Sentiment

1. Brazilian currency weakness: A weaker real can encourage Brazilian exporters to increase dollar-denominated sales, adding short-term pressure to arabica prices.
2. Higher Brazilian arabica production: Conab expects 2026 arabica output to rise 34.8% year-on-year to 48.21 million bags.
3. Rising Brazilian exports: September coffee exports increased by more than 20% year-on-year to 236,000 MT, signalling stronger export availability.
4. Strong Vietnamese exports: September exports rose 53% year-on-year, while January–September shipments increased 16.2%.
5. Record global production forecasts: The ICO and USDA both project substantial global output, increasing the risk of surplus supply.
6. Improving crop conditions: Recent rainfall in Vietnam and developing moisture conditions in Brazil could support the next harvest if favourable conditions persist.
7. Potential additions to arabica inventories: Coffee arriving for ICE grading could eventually increase certified stocks and reduce the support provided by currently low inventory levels.

Coffee Technical Analysis and Price Forecast

The latest session highlights the different short-term dynamics in arabica and robusta. Arabica is under pressure from Brazilian currency weakness and the prospect of increased exporter selling, while robusta has gained support from the stabilisation of exchange inventories.

The supplied report does not include absolute settlement prices or chart-based support and resistance levels. Specific price targets and technical indicators therefore cannot be established reliably from the available information.

Arabica: Bearish Near-Term Pressure, Supply Risks Remain

Arabica may remain vulnerable if the Brazilian real weakens again, exporters accelerate sales and additional coffee enters ICE-certified inventories.

The bearish case would strengthen if Brazilian production estimates remain high, exports continue to increase and global supply forecasts are maintained or revised higher.

Conversely, a sustained decline in arabica inventories, a stronger Brazilian real or evidence of weather-related crop damage could help prices recover. Colombia’s lower production also remains a potential source of support.

Robusta: Inventory Support Versus Vietnamese Exports

Robusta’s recent gain suggests that the pause in inventory growth is providing near-term support. However, this support could weaken if Vietnamese exports remain strong and expectations for global supply continue to improve.

A sustained reduction in ICE robusta inventories and evidence of drought risk in Vietnam could strengthen the bullish case. Continued export growth, favourable rainfall and expanding global supply would leave the market vulnerable to renewed selling.

Key Factors to Watch

• Brazilian real: Further currency weakness could encourage additional export selling.
• ICE arabica stocks: Monitor whether inventory declines continue or grading arrivals lead to a recovery.
• ICE robusta stocks: A sustained reversal in the recent inventory decline could alter short-term sentiment.
• Brazilian crop development: Rainfall and flowering conditions will influence confidence in the expected production recovery.
• Vietnamese exports and weather: Strong shipments may weigh on prices, while drought concerns could tighten the future supply outlook.
• Global production and consumption: Revisions to the projected surplus will help determine whether current bearish supply expectations remain justified.

Market Outlook for the Coming Sessions

Coffee prices are likely to remain sensitive to currency movements, inventory updates and evidence about the next major harvests. Arabica faces the more immediate selling pressure, with the Brazilian real’s depreciation potentially encouraging exporters to increase sales at a time when Brazil’s production outlook is improving.

However, low ICE arabica inventories and weaker Colombian production provide counterbalancing support. The arrival of nearly 10,000 bags for grading introduces a further variable, as some of that coffee may eventually enter certified stocks.

Robusta has benefited from the pause in rising ICE inventories, but the market remains exposed to strong Vietnamese export volumes and expectations for greater global supply. Whether the recent price increase can persist will depend partly on the direction of inventories and the outlook for Vietnam’s next crop.

Over the medium term, weather risks could become increasingly important. El Niño-related drought in Brazil or Vietnam would challenge the expected production recovery, while favourable growing conditions could reinforce forecasts for record global output.

The overall outlook remains mixed to bearish for coffee prices, with arabica exposed to near-term selling pressure and both markets vulnerable to changing weather expectations. Low arabica inventories and the risk of future crop disruption could nevertheless produce sharp recoveries, particularly if production forecasts begin to deteriorate.

Currency Hedger View

The coffee market demonstrates how commodity prices and foreign exchange can influence the same commercial transaction. A weaker Brazilian real may encourage exporters to sell coffee, affecting global benchmark prices, while businesses purchasing coffee in US dollars may face additional currency exposure if their revenues or operating costs are denominated in another currency.

For roasters, importers, processors and other businesses with significant coffee requirements, the combination of volatile commodity prices, changing export availability and exchange-rate movements can complicate procurement budgets and margin planning.

A structured review of commodity and currency exposure can help businesses assess how different price and exchange-rate scenarios affect future costs and receipts. Currency Hedger provides information on managing these risks and exploring appropriate hedging approaches.

Visit Currency Hedger to explore commodity and currency risk management, or open an account to begin a discussion about your business exposure.

Disclaimer

This article is provided for informational and educational purposes only and does not constitute investment, financial, trading, legal or tax advice, or a recommendation to buy or sell any financial instrument. Commodity futures and foreign-exchange products involve risk and may not be suitable for all businesses or investors. Prices can move sharply, and hedging strategies may involve costs, margin requirements, liquidity risk and imperfect correlation with the underlying exposure. Production forecasts and weather projections are uncertain and may change as new information becomes available. Seek appropriate professional advice before making financial or hedging decisions.