World Coffee Prices Fall 25% as Global Supply Climbs to a Record High

World Coffee Prices Fall 25% as Global Supply Climbs to a Record High

 

The U.S. Department of Agriculture forecast record world coffee production of 189.7 million bags for 2026/27 in its July 22 report. The biannual circular put the increase at 10.8 million bags over last season. A rebounding Brazilian Arabica harvest accounted for most of the gain.

Key Facts

  • World coffee output is forecast at record 189.7 million bags in 2026/27, up 10.8 million from last year.
  • Global coffee supplies expanded enough to drag prices down 25% in seven months.
  • Brazil's Arabica harvest is forecast at 47.5 million bags, up 9.5 million after five straight years of decline.

 

Brazil accounts for nearly 40% of world coffee production. Its Arabica crop alone supplies 40% to 50% of the world's Arabica, depending on where the country sits in its biennial production cycle.

Arabica trees alternate between higher-yielding "on" years and lower-yielding "off" years as the plant shifts energy between fruiting and vegetative growth. That swing can move global production by 5 to 10 million bags in either direction.

World Coffee Production Chart

Brazil's rebounding Arabica crop lifted the country's total to a forecast 71.9 million bags, more than four of every ten bags in the world total. Vietnam, Colombia, and Ethiopia are all forecast to reach record output of their own this season, adding to the gain. Indonesia is the lone major producer moving the other way, with output down 1.0 million bags on excessive rainfall.

Favorable Weather in Minas Gerais Lifts Brazil's Arabica Yields

Brazil's Arabica production is forecast to rebound 9.5 million bags to 47.5 million in 2026/27, ending five straight years of underperformance tied to adverse weather.

Timely rainfall during the September and October flowering window supported fruit development. It drove near-record yields in Minas Gerais, the state that grows more than 70% of Brazil's Arabica.

The 2026/27 crop is forecast to be the second-largest Arabica harvest on record. Yields have swung since 2021/22, when drought and heat cut that year's off-year crop by 13.3 million bags.

The following on-year rebounded just 3.4 million bags after frost and below-average rainfall. Excessive rainfall during fruit development then held back the 2023/24 gain, and two more years of drought and heat followed before this season's recovery.

Robusta Pulls Back After Last Year's Record Harvest

Brazil's Robusta production is expected to retreat 600,000 bags to 24.4 million after last year's record crop. Cooler temperatures combined with periods of elevated rainfall to lower yields in Espirito Santo, where about 70% of the country's Robusta is grown.

Indonesia's Robusta crop is forecast down 1.0 million bags to 10.0 million for a similar reason. Excessive rainfall disrupted flowering and cherry formation in the lowland growing areas of southern Sumatra and Java, which produce about 75% of the country's output. Indonesia's bean exports are forecast to fall by more than 800,000 bags to 7.0 million on the lower supply.

World Supply Continues to Climb while Coffee Prices Fall

World coffee bean exports are forecast to rise 11.9 million bags to a record 131.4 million on the higher output. Global consumption is expected to climb to a record 179.7 million bags, with the largest gains in the European Union and the United States.

  • Vietnam's crop is forecast up 800,000 bags to a record 32.5 million on expanding area and higher yields.
  • Recent high prices let growers spend more on fertilizer and other inputs.
  • Colombia's output is expected to rise 900,000 bags to 13.4 million on adequate soil moisture.
  • Ethiopia is forecast to grow by more than 500,000 bags to a record 12.1 million as replanting with higher-yielding varieties continues.

Ending stocks are forecast to rise for a second consecutive year to 26.3 million bags. They remain below the long-term average. Coffee prices fell 25% over the past seven months as the additional supply became available, per the International Coffee Organization's monthly composite price index.

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Contributing Writer, BestSprouts