Arabica Coffee Market Faces Oversupply Pressure

2026-02-25 15:55 By Agna Gabriel 1 min. read

Arabica coffee futures traded around $2.8 per pound, hovering near their lowest level since July 2025 and more than 30% below the 8-month high of $4.23 on November 11, driven by a significant improvement in global supply expectations, particularly from Brazil, the world's leading producer.

Brazil’s crop forecasting agency, Conab, recently projected a record-breaking 2026/27 harvest of 66.2 million bags, fueled by beneficial rainfall in key regions like Minas Gerais.

Furthermore, a recovery in ICE-monitored inventories and soaring exports from Vietnam have alleviated the supply tightness that gripped the market throughout much of 2025.

Although a firmer Brazilian real triggered some short covering, sentiment remains weak as the market shifts from scarcity toward a potential surplus.



News Stream
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Arabica coffee futures surged to around $2.95 per pound, their highest since early September, partly due to quality concerns over Brazil's 2026 crop and uncertainty about the next season. Although Brazil is heading toward a record crop this year, recent heavy rainfall in the world's largest coffee producer not only delayed harvest but also affected the drying process of highest quality beans. This also means less coffee will be available to replenish depleted stocks in ICE-certified warehouses in both the US and Europe. Certified Arabica coffee stocks on ICE remain historically tight, hovering at a 27-year low in September before recovering somewhat. Meanwhile, traders continued to monitor weather conditions which could prove critical for the 2027 coffee crop as El Niño poses a potential threat. The crop is entering its flowering period, with concerns mounting over limited rainfall in key Arabica-producing areas, particularly Minas Gerais.
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