Arabica Coffee Hovers Around 3-Month Lows

Arabica coffee futures traded around $2.73 per pound, near their lowest since June, amid signs of increased global supply and more favorable prospects for Brazil's next crop. The International Coffee Organization (ICO) recently projected that global output in 2025/26 will have grown 4.4% yoy to a record 183.6 million bags, while consumption is estimated to have fallen 0.9% to 180.6 million, leaving a surplus of around 3 million bags, the first in five years. Brazilian supply is also picking up, with coffee exports up 31% yoy to a record 4.155 million bags in August. Large volumes of Brazilian Arabica are also heading to ICE warehouses, which could help replenish low inventories. Meanwhile, recent rains in Brazil’s main producing regions have improved soil moisture during a crucial period for flowering and development of the 2027/28 crop. However, the outlook remains weather-dependent, particularly from December to March, when rainfall will be key for fruit development and final yields.