Coffee futures extended losses for a second straight session on Tuesday, with December arabica settling lower and November robusta sliding even further as traders weighed signs of ample global supplies and rising inventory pressure for robusta. The declines followed fresh reports pointing to large projected harvests and improved growing conditions in key producing regions, even as some arabica warehouse data remains tight.
Key takeaways
- Price move: December arabica coffee fell for a second day, closing down 1.48%, while November ICE robusta ended lower, down 2.31%.
- Catalyst: Expectations of abundant global supply—reinforced by the International Coffee Organization’s surplus outlook—plus inventory strength for robusta weighed on prices.
- Arabica vs. robusta: Arabica inventories have recently moved away from very low levels, but robusta warehouse stocks climbed to a multi-month high.
- Supply outlook: Reports of strong Brazil and Vietnam export flows added to concerns that more coffee will reach the market.
- Implication for investors: Markets appear to be pricing near-term supply strength more aggressively than weather-risk premiums, though El Niño warnings could reintroduce volatility.
What drove the move
According to the International Coffee Organization, the global coffee market is projected to swing into a surplus. On September 10, the ICO forecast 2025/26 global coffee production rising 4.4% year over year to a record 183.6 million bags, while consumption was seen declining 0.9% year over year to 180.6 million bags. The result, the ICO said, is a surplus of roughly 3 million bags—its first in five years.
Against that backdrop, losses accelerated in robusta after ICE robusta coffee inventories increased to a 9.75-month high on Tuesday, according to exchange inventory reporting cited in market coverage. Inventory builds typically signal loosening balance conditions, reducing the urgency for buyers and pressuring futures prices.
Weather and agronomy reports also fed the bearish tone. Beneficial conditions in Brazil and Vietnam—two central production regions—were highlighted as factors that could support upcoming harvests.
In Brazil, Somar Meteorologia reported that during the week ended September 20 in Minas Gerais, the country’s main arabica-growing area, rainfall totaled 33.4 millimeters—about 242% of the historical average—according to market commentary. For Vietnam, forecaster Vaisala pointed to abundant rains improving soil moisture and supporting cherry development in Vietnam’s Central Highlands, its largest coffee-producing region.
Market reaction and what inventories suggest
Arabica weakness also reflected broader supply expectations, even as the inventory picture has been mixed recently. The report noted that ICE arabica inventories had fallen to a 27-year low of 217,646 bags last Tuesday but then rebounded to a 1.5-month high of 258,415 bags by last Friday. That sequence suggests the market has struggled to sustain tightness, leaving room for prices to decline as supplies normalize.
Robusta showed a clearer negative inventory trend. ICE robusta inventories rose to 5,088 lots on Tuesday, a 9.75-month high cited in the coverage. With robusta already pressured by expectations for plentiful production, continued stock accumulation can be difficult for bulls to counter without a disruption to crop prospects.
Exports and regional supply signals
Export data added to the supply narrative. Market coverage cited Cecafe, which reported that Brazil’s total coffee exports in August increased 31% year over year to 4.155 million bags, described as a record for the month. Arabica exports in August rose 26% year over year to 2.87 million bags, while robusta exports jumped 54% to 953,592 bags.
Separately, Brazil’s Trade Ministry reported that August coffee exports rose 44.6% year over year to 206,618 metric tons, the most in eight months, according to the same reporting. As Brazil’s harvest cycle moves through its later stages and the flow to overseas markets continues, traders often look closely at whether export strength translates into sustained price pressure.
Vietnam—particularly important for robusta—also provided indicators of rising global availability. The coverage cited Vietnam’s National Statistics Office reporting that Vietnam’s 2026 coffee exports (January through August) increased 13.7% year over year to 1.33 million metric tons. It also noted that 2025 coffee exports rose 17.5% year over year to 1.58 million metric tons.
Production projections were similarly supportive of a larger supply outlook. Vietnam’s 2025/26 coffee production was projected to rise 6% year over year to a four-year high of 1.76 million metric tons (about 29.4 million bags), according to market reporting.
Bigger picture: weather risk vs. supply expectations
While immediate fundamentals leaned bearish, the market still has a weather-risk component. Concerns that an El Niño pattern could disrupt Brazil’s flowering period next year were cited as a potential counterweight. The report referenced Commercial’s view that El Niño may delay rains in Brazil during September and October, when tree flowering normally occurs, potentially affecting the 2026/27 crop.
It also noted that the U.S. Climate Prediction Center said El Niño conditions emerging across the equatorial Pacific in August are likely to be among the strongest in more than 75 years, setting up potential variability later in the year that could affect coffee production across parts of Asia and South America.
Still, the bearish supply framing has remained dominant in the near-term. The report cited the latest USDA biannual forecast from July 22 as expecting global coffee output in the 2026–27 season to rise 6.0% to a record 189.7 million bags. It also pointed to expected increases in arabica output, while robusta production was forecast to decline slightly, and ending stocks to rise by 1.9 million bags to 26.3 million bags.
Coffee investors will likely focus next on whether inventory trends continue to diverge between arabica and robusta and whether weather developments shift perceptions about Brazil’s next flowering and harvest prospects. With El Niño risk still in the background and major crop forecasts already pointing to higher global output, upcoming meteorological updates and follow-through in export and inventory data will be key drivers of direction in the near term.
