December arabica coffee futures (KCZ26) settled down 4.40 cents, or 1.39%, while November ICE robusta coffee (RMX26) dropped $74 per metric ton, a 2.12% decline, as mounting evidence of ample global supplies pressured the market Tuesday.
The selloff was driven by rising certified inventories. Arabica stocks pending grading at the Intercontinental Exchange (ICE) surged to nearly 28,000 bags, the highest level in over a month. Simultaneously, ICE robusta inventories climbed to an 11.5-month high on Monday, signaling comfortable near-term availability for the Robusta variety.
Prices had rallied to a six-week high the previous session on fears that a strengthening El Niño pattern could threaten crops in Brazil and Vietnam next year. Vietnam’s Agriculture Ministry warned last week that the Central Highlands, the nation’s primary coffee belt, faces potential drought risk extending into early 2027. The U.S. Climate Prediction Center indicated in July that the current El Niño event could rank among the strongest in 75 years, raising the specter of disruptive weather across key growing regions in Asia and South America.
However, recent fundamental data has shifted focus toward abundance. Colombia’s Coffee Federation reported that 2025/26 production fell 15% year-over-year to 12.65 million bags, with exports declining 12% to 11.78 million bags, though this shortfall appears offset by bumper crops elsewhere.
Beneficial weather in top producers Brazil and Vietnam is fostering a bearish outlook. Above-average rainfall in Brazil’s Minas Gerais region during the critical flowering stage—148% of the historical average in the week ending October 18, per Somar Meteorologia—bodes well for the 2026/27 harvest. In Vietnam, abundant rains have improved soil moisture and supported cherry development in the Central Highlands.
Export data underscores the supply surge. Brazil’s September coffee exports jumped over 20% year-over-year to 236,000 metric tons. Vietnam’s September exports surged 53% to 124,000 metric tons, pushing year-to-date 2026 shipments up 16.2% to 1.45 million metric tons. Vietnam’s 2025/26 production is projected to rise 6% to a four-year high of 1.76 million metric tons (29.4 million bags).
The International Coffee Organization (ICO) projected a record 2025/26 global crop of 183.6 million bags, a 4.4% increase, against a 0.9% dip in consumption to 180.6 million bags. This implies a 3 million bag surplus—the first in five years. Supporting this view, Brazil’s Conab raised its 2026 production estimate to 67.6 million bags, led by a 34.8% rebound in arabica output.
Inventory dynamics remain divergent. ICE arabica stocks, which hit a 27-year low of 217,646 bags in mid-September, have rebounded to a 2.5-month high of 260,654 bags. Conversely, robusta stocks continue to climb, reaching 5,964 lots on Monday.
Long-term forecasts reinforce the bearish supply narrative. The USDA projects 2026/27 global output will rise 6% to a record 189.7 million bags, driven by a 12% jump in arabica production. World ending stocks are seen rising to 26.3 million bags. The USDA’s Foreign Agricultural Service separately forecast a record Brazilian 2026/27 crop of 71.9 million bags, up 14% year-over-year.