Coffee Futures Slip as Favorable Rainfall in Brazil and Vietnam Weighs on Supply Outlook

December arabica coffee (KCZ26) closed down -6.85 (-2.36%) on Tuesday, and November ICE robusta coffee (RMX26) closed down -54 (-1.53%).

Coffee prices moved lower on Tuesday as favorable growing conditions in Brazil and Vietnam weighed on the market. Above-normal rainfall in Brazil during the critical flowering stage may benefit the upcoming 2026/27 coffee harvest, a bearish factor for prices. On Monday, Somar Meteorologia reported that 59.4 mm of rain—1,212% of the historical average—fell in the week ended September 13 in Brazil’s Minas Gerais, the country’s primary arabica-coffee growing region. In Vietnam, forecaster Vaisala reported that abundant rains have improved soil moisture levels and should support cherry development in Vietnam’s Central Highlands, the nation’s largest coffee-producing region.

On Monday, arabica coffee fell to a 2.5-month low on negative carryover from last Thursday, when Cecafe reported that Brazil’s total coffee exports in August rose +31% year over year to 4.155 million bags, a record high for the month of August. August arabica exports rose +26% to 2.87 million bags, while robusta exports rose +54% to 953,592 bags. Brazil’s coffee is reaching export markets as the country’s harvest concludes. Separately, Brazil’s Trade Ministry reported last Tuesday that Brazil’s August coffee exports rose +44.6% year over year to 206,618 MMT, the highest level in eight months.

Coffee prices have come under pressure over the past three weeks amid an outlook for abundant global supplies. Last Thursday, the International Coffee Organization (ICO) projected a record global coffee crop and a surplus. The ICO reported that 2025/26 global coffee production rose +4.4% year over year to a record 183.6 million bags, while consumption fell -0.9% year over year to 180.6 million bags, leaving the global coffee market in a 3 million bag surplus—the first surplus in five years.

On September 3, robusta fell to a 3-month low on signs of larger coffee supplies from Vietnam, the world’s largest producer of robusta coffee. Vietnam’s National Statistics Office reported last Wednesday that Vietnam’s 2026 coffee exports (January–August) rose by +13.7% year over year to 1.33 MMT. Vietnam’s 2025 coffee exports jumped by +17.5% year over year to 1.58 MMT. Additionally, Vietnam’s 2025/26 coffee production is projected to climb +6% year over year to a four-year high of 1.76 MMT (29.4 million bags).

Falling inventories are bullish for arabica coffee prices, as ICE arabica coffee inventories fell to a 27-year low of 217,646 bags on Tuesday. By contrast, rising inventories are bearish for robusta coffee, as ICE robusta inventories climbed to a 9.5-month high of 5,043 lots on Monday.

Concerns that an El Niño weather pattern could hurt Brazil’s coffee crop next year are bullish for prices. Coffee trader Commercial noted that the El Niño weather pattern may delay rains in Brazil during September and October, when tree flowering normally occurs, potentially harming Brazil’s 2026/27 coffee crop. On July 8, the US Climate Prediction Center said the El Niño weather pattern that emerged across the equatorial Pacific last month will likely be one of the strongest in more than 75 years. This sets the stage for months of possible floods, droughts, and temperature fluctuations later this year that could hinder coffee production in Asia and South America.

The latest USDA biannual forecast was bearish for coffee prices. On July 22, the USDA forecast that global coffee output in the 2026–27 season will rise by +6.0% (10.8 million bags) to a record 189.7 million bags, mainly due to improved growing conditions in Brazil. The USDA expects global arabica production to rise +12% year over year, although robusta production is expected to decline by -0.7% year over year. World ending stocks are expected to rise +1.9 million bags to 26.3 million bags. On June 3, the USDA’s Foreign Agricultural Service (FAS) forecast a record 2026/27 Brazil coffee crop of 71.9 million bags, up +14% year over year.

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