The global coffee market is shifting from fears of supply shortages to expectations of a surplus and rebuilding inventories, as favorable weather in major producing countries improves the outlook for production, according to Rabobank.
In a report released Wednesday, senior analyst Claudio Delposte said better growing conditions in Brazil, Vietnam and Indonesia, along with stronger Brazilian exports, are helping ease supply concerns that have fueled price volatility in recent months.
Brazilian coffee exports rose 22% in August from July and 31% from a year earlier, according to Cecafe, Brazil’s coffee exporters council. Shipments reached their highest level on record for the month of August, signaling increased availability of Brazilian supplies.
Exports continued to grow in September, supported by a recovery in purchases by the United States. The increase brought cumulative shipments for the year broadly in line with the same period in 2025, reversing a decline recorded through August.
Growing conditions have also improved. In September, Brazil’s main arabica and robusta producing regions received rainfall above the 15-year average, benefiting the first flowering of the 2027/28 crop.
“With coffee trees at a critical stage of flowering and vegetative growth, these conditions support production potential and reinforce the favorable outlook for the 2027/28 crop,” Rabobank said.
Arabica Prices Slide
Coffee prices have begun reflecting the improved supply outlook.
Arabica futures in New York fell 15.1% in September, following months of weather-driven volatility, including harvest delays in parts of Brazil caused by excessive rainfall in June and July.
Robusta futures in London, meanwhile, edged up 0.4%, reflecting a more limited improvement in supply availability across producing countries, including Brazil.
“The arabica premium over robusta narrowed, reflecting greater weakness and volatility in arabica, while robusta proved more resilient,” Rabobank said.
The divergence underscores the need for coffee processors and other industry participants to closely monitor profit margins and price spreads, according to the bank.
Rabobank cautioned that the balance between supply and demand remains uncertain, with several key variables still to be determined during the production cycle. Weather, crop development, logistics and commercial conditions will remain critical factors to watch, it said.
Global Inventories Set to Rebuild
Expectations of a recovery in global coffee inventories have been building since at least May.
At the 25th International Coffee Seminar in Santos, Brazil, industry experts projected that global production could exceed consumption by 10 million 60-kilogram bags in 2026.
Even that volume would have provided only a limited buffer, equivalent to roughly two weeks of global consumption, according to Carlos Santana, commercial director at EISA Interagrícola and vice president of the Santos Commercial Association.
Rabobank now forecasts a surplus of 8.9 million bags in the 2026/27 season.
That would lift global inventories to 11.9 million bags by the end of the season, from an estimated 3 million bags at the close of the previous crop year, according to figures from the International Coffee Organization (ICO).
The projected recovery would mark a significant easing of the tight supply conditions that have dominated the coffee market, although weather developments and production risks remain important sources of uncertainty.
This story was translated from the original Portuguese with the assistance of artificial intelligence and reviewed by The AgriBiz editorial staff.
