Tag: Arabica

USDA Report: India’s Coffee Sector Faces Climate Challenges and Historic Trade Opportunities

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Author: Qahwa World – Dubai
Source: USDA Foreign Agricultural Service (FAS) – New Delhi Office
Report Number: IN2026-0026
Date: May 13, 2026
Executive Summary

  • India MY 2026/27 coffee production forecast at 6.14 million 60-kg bags
  • Arabica yields expected to decline 8% due to excessive rainfall followed by extended dry spell
  • Farmgate prices for Arabica down 16%, Robusta down 11% since October 2025
  • New free trade agreements with UK and EFTA countries offer zero tariffs on Indian coffee exports
  • Domestic consumption projected at 1.58 million bags, driven by soluble coffee demand
  • India aims to reach 900,000 metric tons production by 2047

1. Overview: India’s Position in Global Coffee Market

India ranks as the world’s seventh-largest coffee producer, after Brazil, Vietnam, Colombia, Indonesia, Ethiopia, and Uganda. Approximately 95 percent of India’s coffee production is exported, with green coffee accounting for about 59 percent of total exports and instant (soluble) coffee making up the remaining 41 percent.

According to the USDA Foreign Agricultural Service report from the New Delhi office, India’s coffee sector is at a critical juncture. The country faces climate-related production challenges while simultaneously gaining unprecedented access to European markets through newly ratified free trade agreements.

Key Insight: India’s coffee production comprises approximately one-third Arabica and two-thirds Robusta, with Robusta accounting for over 75% of total output due to its greater resilience to weather variability.

2. Production Forecast: MY 2026/27

FAS Mumbai forecasts India’s MY 2026/27 coffee production at approximately 368,400 metric tons, or about 6.14 million 60-kilogram bags, comprising 1.56 million 60-kg bags of Arabica (93,600 metric tons) and 4.58 million 60-kg bags of Robusta (274,800 metric tons).

📊 Figure 1: India Production Trend
Source: USDA/FAS (Chart data described below)
Figure 1: India coffee production has grown at a CAGR of 2.05% between MY 2021/22 and MY 2024/25

Production Data Table

Table 1: India Coffee Production Forecast (1000 60-kg bags)
Category MY 2024/25 (Actual) MY 2025/26 (Estimate) MY 2026/27 (Forecast)
Arabica Production 1,762 1,730 1,560
Robusta Production 4,297 4,700 4,580
Total Production 6,059 6,430 6,140

3. Climate Challenges: The Threat to Arabica

The India Meteorological Department’s first long-range outlook for the 2026 southwest monsoon indicates below-normal rainfall at about 92 percent of the long-period average, with a 66 percent probability of below-normal to deficit conditions.

Arabica output is expected to decline due to below-normal monsoon rainfall combined with unusually high temperatures, which may adversely affect flowering and fruit set. In contrast, Robusta production is projected to remain relatively strong, reflecting its greater resilience to weather variability.

Rainfall Data for Coffee Growing Regions

Table 2: Rainfall Statistics for Karnataka and Kerala (January – April 2026)
State/District Winter (Jan-Feb) Departure Pre-Monsoon (Mar-Apr) Departure
Chikmagalur (Karnataka) Large Excess (+244%) Normal (-17%)
Kodagu (Karnataka) Large Excess (+177%) Normal (-7%)
Wayanad (Kerala) Large Excess (+235%) Deficit (-48%)
Travancore (Kerala) Excess (+48%) Deficit (-53%)

The data reveals a stark pattern: excessive winter rainfall (January-February) followed by deficit pre-monsoon rains (March-April). This extreme weather variability – from flooding to drought within weeks – is precisely the type of climate shock that most damages coffee flowering and fruit set, particularly for the more sensitive Arabica variety.

4. Yield Projections

For MY 2026/27, Arabica yields are projected to decline by eight percent year-on-year to 452 kilograms per hectare, while Robusta yields are expected to fall marginally by two percent to 1,239 kilograms per hectare, although still above the three-year average.

Table 3: Coffee Yield Comparison (kg per hectare)
Coffee Type MY 2026/27 Forecast 3-Year Average (2022-2024) Change
Arabica 452 475 -8%
Robusta 1,239 1,156 +7% (above average)
Why Robusta Outperforms: Robusta yields remain about 2.3 times higher than Arabica, reflecting its greater resilience and productivity. Arabica is more sensitive to altitude, pest, and climate variability, requiring more precise growing conditions.

5. Price Dynamics: Decline from Record Highs

Farmgate prices for Arabica and Robusta have declined by 16 percent and 11 percent respectively since October 2025. Despite this change, prices remain at a premium to other origins, though further moderation is expected. The decline in prices is being driven by expectations of higher output in key producing countries and elevated domestic stock levels.

📊 Figure 2: Farmgate Raw Coffee Prices in Karnataka
Exchange rate: Rupees 92.99 per US dollar (as of April 20, 2026)
Source: Coffee Board of India
Figure 2: Indian coffee prices have moderated but still trade at premium to competing origins

6. Export Outlook: Trade Agreements Transform Market Access

Post forecasts that MY 2026/27 coffee exports will rise by three percent to 6.22 million bags (373,140 metric tons), driven by higher exportable surplus and strong demand for soluble coffee exports.

New Free Trade Agreements

Table 4: New Trade Agreements Benefiting Indian Coffee Exports
Agreement Partner Countries Benefit for Coffee Effective Date
India-UK CETA United Kingdom Zero duty on roast, ground, and instant coffee Recently concluded
India-EFTA TEPA Switzerland, Norway, Iceland Zero percent duty on all coffee exports October 1, 2025

The United Kingdom currently accounts for 1.7 percent of India’s coffee exports, while the EFTA countries (Switzerland, Norway, Iceland) offer new zero-tariff access. Europe has emerged as a more stable trading partner with increased inquiries. Italy remains the top destination, using almost 60 percent of imported Indian coffee domestically while 40 percent is processed for private label manufacturers for re-exports.

Export Destinations

📊 Figure 3: Coffee Export Share by Country (percentage)
Italy leads, followed by Germany, Russia, Belgium, and UAE
Source: Trade Data Monitor, LLC
Figure 3: Indian coffee exported to more than 125 countries, with 61% of shipments from Mangalore port

7. Export Challenges: Premium Prices and Freight Costs

Despite positive momentum, several challenges exist. Indian coffee prices are significantly higher than competing origins from Vietnam and Indonesia. High premiums could pose challenges to exports despite recent prices being lower than last year.

Freight costs to the Middle East have surged dramatically, from $700-$1,200 per 20-foot container in January/February to $1,500-$2,800, with occasional short-term spikes higher due to war risk surcharges, insurance costs, and vessel rerouting. Trade data indicates that about 11-12 percent of India’s total coffee exports in green bean equivalent go to the Middle East, the second-largest regional market after Europe (44-45 percent).

8. Domestic Consumption: A Growing Market

Post forecasts MY 2026/27 domestic consumption at 1.58 million 60-kilogram bags (94,800 metric tons), supported by rising demand for soluble coffee. Household consumption of soluble coffee is expected to account for a significantly larger share of domestic consumption, rising to around 73 percent next year.

India’s per capita coffee consumption remains at 0.04 kilograms, well below the global average of 1.3 kilograms, indicating significant growth potential.

Table 5: Domestic Consumption Breakdown (1000 60-kg bags)
Category MY 2024/25 MY 2025/26 MY 2026/27 Forecast
Roast & Ground Domestic 330 415 420
Soluble Domestic 820 1,160 1,160
Total Domestic Consumption 1,150 1,575 1,580

9. Long-Term Vision: India 2047

The Coffee Board of India has set an ambitious long-term target of increasing national coffee production to 900,000 metric tons by 2047, through a combination of productivity gains, area expansion, and value-chain improvements. This includes replanting old and low-yielding bushes with high-yielding, climate-resilient varieties, promoting better agronomic practices (irrigation, pruning, soil health), and expanding cultivation into non-traditional regions.

📊 Figure 4: Monthly Coffee Exports by Volume (October-September)
5-year average vs 2024/25 vs 2025/26
Source: Trade Data Monitor, LLC
Figure 4: Exports in MY 2025/26 (October-January) were 26% higher than the previous year

10. Imports: Filling the Gap

Post forecasts MY 2026/27 imports at 1.39 million 60-kilogram bags (83,400 metric tons). Imports are expected to be four percent higher than last year as the use of Indian coffee in soluble coffee re-exports remains limited due to domestic beans trading at a premium, necessitating higher reliance on imported beans for processing and value addition.

Green beans account for approximately 94 percent of total imports and are primarily sourced from Indonesia, Kenya, Vietnam, Uganda, and Brazil for processing and re-export.

Table 6: India Import Tariff on Coffee Products
HS Code Product Description Standard Rate
0901.11 Coffee not roasted, not decaffeinated 100%
0901.12 Coffee not roasted, decaffeinated 100%
0901.21 Coffee roasted, not decaffeinated 100%
2101.11.20 Instant coffee not flavored 30%

11. Key Challenges Facing Indian Coffee Sector

  • Climate Variability: Excessive rainfall followed by extended dry spells during critical flowering stage
  • Fertilizer Costs: Persistent shortages and rising input costs across the value chain
  • Labor Availability: Coffee production is labor intensive, with nearly 70% of production cost attributable to labor
  • Premium Pricing: Indian coffee prices significantly higher than competing origins from Vietnam and Indonesia
  • Freight Disruptions: Surging shipping costs to Middle East due to geopolitical tensions

12. Opportunities

  • Free Trade Agreements: Zero tariff access to UK, Switzerland, Norway, and Iceland
  • Growing Domestic Market: India’s coffee market projected to grow at 8.9% CAGR by 2028
  • Soluble Coffee Demand: Double-digit growth in domestic soluble coffee consumption
  • Specialty Coffee: Estate branded coffees commanding prices comparable to export levels
  • Youth Demographic: Expanding urban coffee culture and younger consumers driving growth

Frequently Asked Questions

How much coffee will India produce in 2026/27?

According to the USDA FAS report, India is forecast to produce 6.14 million 60-kilogram bags (approximately 368,400 metric tons) in MY 2026/27, comprising 1.56 million bags of Arabica and 4.58 million bags of Robusta.

Why is Arabica production expected to decline?

Arabica yields are projected to decline 8% due to excessive rainfall in January and February 2026 followed by an extended dry spell during the critical flowering and fruiting stage. Arabica is more temperature-sensitive and has higher water requirements compared to Robusta.

What are the new trade agreements benefiting Indian coffee?

The India-UK Comprehensive Economic and Trade Agreement (CETA) offers duty-free access for roast, ground, and instant coffee to the United Kingdom. The India-EFTA Trade and Economic Partnership Agreement (TEPA), effective October 1, 2025, provides zero percent duty on all coffee exports to Switzerland, Norway, and Iceland.

How have coffee prices changed in India?

Farmgate prices for Arabica have declined by 16 percent and Robusta by 11 percent since October 2025. Despite this decline, Indian coffee prices remain at a premium to other origins, though further moderation is expected.

What is India’s long-term coffee production target?

The Coffee Board of India has set an ambitious target of increasing national coffee production to 900,000 metric tons by 2047 through productivity gains, area expansion, replanting with high-yielding varieties, and value-chain improvements.

Who are the main buyers of Indian coffee?

Italy remains the major buyer, followed by Germany, Russia, Belgium, and the United Arab Emirates. Indian coffee is now exported to more than 125 countries, with approximately 61 percent of shipments originating from the Mangalore port in Karnataka.

Author: Qahwa World – Dubai
Source: USDA Foreign Agricultural Service (FAS) – Report IN2026-0026
Date: May 13, 2026
Report Availability: The full USDA report can be accessed through the USDA PSD Online Advanced Query system.

 

Coffee Futures Rebound as Dollar Weakness Triggers Short Covering

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Dubai – Qahwa World

Coffee prices climbed back from one-and-a-half-week lows on Friday, ending the session in positive territory. The turnaround came as the U.S. dollar dropped to a two-week low, prompting traders to cover short positions in the coffee market. This price recovery was also influenced by coffee futures short covering as traders adjusted their positions. Notably, coffee futures short covering has played a key role in recent market movements.

July arabica coffee rose 0.85 cents (0.30%), while July robusta coffee gained 3 points (0.09%).

Early Losses on Brazil Crop Outlook

Prices initially moved lower on expectations of a larger harvest in Brazil. The Coffee Trading Academy projected Thursday that Brazil’s 2026/27 coffee crop would rise 12% year-over-year to 71.4 million bags.

Just days earlier, arabica had touched a 1.75-month low following forecasts of a record Brazilian harvest. On March 19, Marex Group predicted a record 75.9 million bags for 2026/27, beating Sucafina’s estimate of 75.4 million bags (up 15.5% annually). StoneX also raised its production outlook for Brazil to an all-time high of 75.3 million bags on March 12, up from a prior forecast of 70.7 million bags. Additionally, StoneX expects the global coffee surplus to balloon from 1.8 million bags in 2025 to 10 million bags in 2026 — the widest surplus in six years. As a result, coffee futures short covering activity may increase amid these predictions.

Vietnamese Exports Weigh on Robusta

Soaring shipments from Vietnam, the world’s top robusta producer, are putting pressure on robusta prices. Vietnam’s National Statistics Office reported on April 3 that first-quarter 2026 coffee exports rose 14% year-over-year to 585,000 metric tons. For all of 2025, exports jumped 17.5% to 1.58 million metric tons. Moreover, Vietnam’s 2025/26 production is expected to climb 6% to a four-year high of 1.76 million metric tons (29.4 million bags).

Supply Tightness Offers Support

On the bullish side, arabica supplies are showing signs of tightness. ICE arabica coffee inventories fell to a two-month low of 494,508 bags on Tuesday, contributing to coffee futures short covering by traders seeking to limit risk.

Similarly, robusta supplies are tightening — ICE robusta stocks dropped to a 16-month low of 3,755 lots last Tuesday.

Geopolitical and Export Factors

Ongoing concerns over a prolonged U.S.-Iran conflict and potential closure of the Strait of Hormuz are also supporting prices. Such disruptions have raised shipping rates, insurance premiums, and costs for fertilizers, fuel, importers, and roasters. Therefore, it is evident that coffee futures short covering remains a significant factor in this volatile environment.

Brazilian export data further supports prices. Cecafe reported on April 14 that Brazil’s March green coffee exports fell 10% year-over-year to 2.65 million bags. Brazil’s Trade Ministry also noted on April 7 that March coffee exports dropped 31% from a year ago to 151,000 metric tons.

Bearish Reports and Forecasts

On the downside, the International Coffee Organization (ICO) said on November 7 that global coffee exports for the current marketing year (October–September) edged down 0.3% year-over-year to 138.658 million bags.

The USDA’s Foreign Agriculture Service (FAS) projected in its December 18 biannual report that world coffee production for 2025/26 would rise 2% to a record 178.848 million bags. That includes a 4.7% drop in arabica output (to 95.515 million bags) and a 10.9% increase in robusta production (to 83.333 million bags). The FAS also forecast Brazil’s 2025/26 crop falling 3.1% to 63 million bags, while Vietnam’s output rises 6.2% to a four-year high of 30.8 million bags. Ending stocks for 2025/26 are expected to decline 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25.

Honduran coffee production surges to 5.53 million bags

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IHCAFE forecasts continued growth in 2026/27 supported by plant nutrition, area expansion, and new plantations; exports rise 7.5% but differentiated coffee share drops sharply in early data.
TEGUCIGALPA — Qahwa World

Honduras will produce 5.53 million 60 kilogram bags of coffee in the 2025/26 marketing year, a 6.3 percent increase from the previous cycle, according to the annual coffee report published by the USDA Foreign Agricultural Service in Tegucigalpa. Notably, the Honduras coffee production forecast for 2026 indicates production is then forecast to jump another 9 percent to 6.03 million bags in 2026/27, returning the country to output levels last seen in 2021/22.

The projected growth is driven by improved plant nutrition, favorable biennial production cycles, expansion of productive areas, enhanced pruning and crop management practices, and the maturation of newly established coffee plantations. Planted area is expected to grow by about 3 percent, or 10,000 hectares, in 2025/26, largely due to the introduction of the rust resistant Parainema variety. Furthermore, forecasts for Honduras coffee production in 2026 are shaped by these agronomic improvements and varietal shifts.

Honduras, one of Central America’s leading coffee producers and a top global exporter of Arabica, concentrates its crop in six key regions: Copan, Montecillos, Opalaca, Comayagua, El Paraiso, and Agalta. Elevations range between 1,000 and 1,600 meters above sea level, where Bourbon, Catuaí, Caturra, and Typica thrive. Looking ahead, the production forecast for Honduras coffee in 2026 continues to inform regional agricultural strategies.

Production outlook and leaf rust pressure

As of March 2026, coffee leaf rust incidence increased from 7.57 percent to 8.44 percent nationally, triggering a Level 4 yellow alert. The rise reflects higher lesion counts and leaf damage, supported by favorable environmental conditions and the unrestricted movement of harvest workers. Despite localized pressures, overall national rust levels remain relatively contained due to dry season conditions in major producing regions. This has important implications for the Honduras coffee production forecast for 2026, since disease pressure can impact yields.

Table 1: Honduras coffee production & export forecasts (million 60 kg bags)
Marketing year Production Exports Ending stocks
MY 2023/24 (actual) 5.00 4.77 0.081
MY 2024/25 (revised) 5.20 4.96 0.178
MY 2025/26 (forecast) 5.53 5.03 0.435
MY 2026/27 (projection) 6.03 5.50 0.707
Table 2: Coffee leaf rust incidence by selected departments (March 2026)
Department Incidence (%)
Comayagua 14.08%
Cortes 12.49%
Santa Bárbara 11.17%
Yoro 10.08%
El Paraíso 9.81%
Intibucá 9.27%
Copán 6.76%

Earlier survey data from April 2025 indicated that 16.67 percent of sampled farms had medium rust incidence (5 to 10 percent), 7.80 percent had high incidence (10 to 15 percent), and 21.63 percent recorded very high incidence above 15 percent. Approximately 5 percent of the current crop remained unharvested as of March 2026, while 44 percent was still in the supply chain awaiting export or processing. This context is significant for anyone examining the country’s 2026 coffee production forecast in Honduras.

Prices, Brazil and market volatility

As of late March 2026, coffee reference prices have shown downward pressure, driven by improved global supply expectations and forecasts of a large Brazilian harvest. While prices have eased from early 2026 highs, they remain volatile. Retail prices have not yet adjusted significantly, reflecting typical lags due to contracts and inventories. In summary, the Honduras coffee production outlook for 2026 is closely tied to international price volatility and market forces.

Weather risks in Brazil, including the potential for early frosts in key producing regions, may place upward pressure on global prices in 2026. However, continued market volatility and rising production costs — including higher diesel prices and fertilizer supply uncertainty linked to the Persian Gulf conflict — may constrain producer margins. Price developments will depend on frost events in Brazil between May and July 2026, crop performance in Vietnam and Colombia, and currency movements, especially the BRL USD exchange rate. Meanwhile, these variables are monitored by analysts as they project the 2026 Honduras coffee production forecast.

Exports grow 7.5%, average price eases

Honduran coffee exports are projected to reach 5.03 million bags in 2025/26, a 7.47 percent increase from the revised 4.96 million bags in 2024/25. For 2026/27, exports are forecast to rise another 9 percent to 5.50 million bags. As of April 2026, Honduras had already exported 3.17 million bags, a 38 percent increase from 2.30 million bags during the same period in 2024/25. The average export price was $439.47 per 60 kg bag, a 2.70 percent decrease from $451.70, but total export value jumped 33 percent to $1.39 billion. These impressive results play a pivotal role in shaping the Honduras coffee production forecast for 2026 and future export trends.

Sales contracts for 2025/26 totaled 4.10 million bags, up 27 percent year on year. Honduras has expanded market access, including under its free trade agreement with South Korea, now the eleventh largest export market for coffee. Globally, Honduras ranks as the eighth largest coffee exporter, the third largest in the Americas, and the largest in Central America. Finally, the Honduras coffee production forecast 2026 continues to be an important reference for market participants and policy decisions.

Table 3: Top destinations for Honduran green coffee exports (2025, thousand 60 kg bags)
Country Volume (1,000 bags)
United States 1,476
Germany 983
Belgium 551
Italy 231
Japan 186
Canada 229
Sweden 149
United Kingdom 147

Domestic consumption and rising imports

Coffee consumption in Honduras is projected to increase 9 percent in 2026/27, supported by modest GDP growth of 3.8 to 4 percent. Per capita apparent consumption is estimated at 4 to 5 kilograms per year. The growing presence of coffee bars in shopping malls, gas stations, and supermarkets, along with a young population consuming diverse coffee drinks, drives demand. Keurig coffee pods and machines are a new trend sold at supermarket chains. It is clear that changing consumption patterns also play into the nation’s coffee production forecast 2026 for Honduras.

Despite being a major producer, Honduras imports coffee to meet domestic demand for soluble coffee and lower cost blends. Total imports are projected to reach 160,000 bags in 2026/27, up 16.8 percent from 137,000 bags in 2025/26. In 2024/25, green coffee bean imports totaled 96,216 bags, primarily from Nicaragua (91,731 bags). Soluble coffee imports from October 2024 through February 2025 reached 30,992 bags, up from 27,516 bags the previous year. Key suppliers included Mexico, the United States, Colombia, Guatemala, India, Malaysia, and Costa Rica. Market dynamics that affect imports are increasingly relevant for the Honduras coffee production forecast looking ahead to 2026.

Differentiated coffee: a sharp shift in early 2025/26

During the 2024/25 harvest, 2.6 million 60 kg bags of differentiated coffee (certified and specialty) were sold, accounting for 55 percent of total exports. The five leading certifications were UTZ, Organic, Fair Trade/Organic, 4C, and Rainforest Alliance. However, preliminary data for 2025/26 shows a significant decline: differentiated coffee fell to 37 percent of total volume, or 1.24 million bags exported to date. This 15 percentage point drop may reflect timing of shipments, production challenges, or evolving market dynamics. Final figures will determine if this is a temporary fluctuation or a sustained trend. The results for differentiated segments will ultimately affect 2026 Honduras coffee production forecast calculations.

Table 4: Differentiated coffee production (thousand 60 kg bags, harvest seasons)
Harvest season Differentiated coffee Total harvest % participation
2019/20 3,020 5,506 55%
2020/21 3,220 5,873 55%
2021/22 2,523 4,701 54%
2022/23 3,087 5,342 58%
2023/24 2,610 4,687 56%
2024/25 2,436 4,804 52%
2025/26* 1,242 3,325 37%
* preliminary figures to April 2026. Source: IHCAFE

Specialty coffee in Honduras is typically grown above 3,000 feet. Currently, specialty coffees are produced under 22 programs including UTZ, 4C, Rainforest Alliance, Organic, Bird Friendly, Starbucks C.A.F.E. Practices, and Cup of Excellence. The overall quality of exported coffee in 2025/26 was classified as 49 percent Strictly High Grown (SHG), 43 percent High Grade (HG), and 9 percent Standard Grade (STD). With specialty coffee trends evolving, analysts will adjust the Honduras coffee production and exports forecast for 2026 accordingly.

Table 5: Quality exports in MY 2025/26 (60 kg bags, to date)
Quality grade Volume (bags) Average price (USD) Share of volume
SHG (Strictly High Grown) 1,618,979 $440.19 49%
HG (High Grade) 1,420,051 $448.27 43%
SL (Screen size >18) 286,479 $361.44 9%

Small producers and policy support

Many small and medium coffee producers face financial constraints, with limited access to credit. According to IHCAFE data for 2024/25, 86,895 small farmers harvested 179,271 hectares and produced 2.63 million bags. Medium producers (6,359 farmers) produced 1.66 million bags, and 374 large farmers produced 515,533 bags. Their contributions are notable in the broader context of the Honduras coffee production forecast for 2026.

Table 6: Producers by size, area harvested and production (2024/25)
Farmer type Farmers registered Area harvested (Ha) Production (60 kg bags)
Small 86,895 179,271 2,627,164
Medium 6,359 85,040 1,661,733
Large 374 21,246 515,533

The government has implemented several measures to support the sector, including a sales tax exemption on coffee (Decree 352 2022) that provides fiscal relief of approximately $183 million. IHCAFE’s “Renew without stopping Production” program supports 33,000 producers covering 250,000 blocks. A climate change policy aims to foster resilience through six five year phases from 2022 to 2050. The National Coffee Council, the highest regulatory body, guides policy on production, climate change, labor, and gender inclusion. The sector adopted a Gender Inclusion Policy in 2021. Policy initiatives such as these directly impact Honduras coffee production forecasts for 2026 and beyond.

As of March 2026, IHCAFE continues providing technical support to help growers meet the European Union Deforestation Regulation, aiming to reduce deforestation tied to agricultural production and foster environmentally responsible supply chains. Overall, actions to comply with international standards also influence the Honduras coffee production forecast for 2026 as the industry adapts to global changes.

Methodological note: All figures are based on the USDA Foreign Agricultural Service report “Coffee Annual – Tegucigalpa – Honduras – HO2026-0002” published April 29, 2026. Marketing years (MY) run from October to September. Differentiated coffee includes certified and specialty coffees. No data from outside the report has been used. Projections for MY 2026/27 are preliminary and subject to revision.

 

Indonesia coffee output falls for second year as heavy rain disrupts harvest

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Dubai – Qahwa World

Indonesia’s coffee production is set to decline for a second consecutive year in 2025–26 as excessive rainfall disrupts key growing regions, although industry participants say cup quality has remained stable due to reduced pressure on processing. Experts are closely watching the Indonesia coffee harvest 2026 to assess its impact on supply and quality.

Arabica and Robusta volumes are both expected to fall from last year’s levels, with Sumatra among the most affected origins after flooding and landslides restricted access to producing areas and disrupted harvest flows, according to Sucafina Indonesia. In addition, stakeholders are keenly monitoring how the Indonesia coffee harvest 2026 may influence these changes.

In Sumatra, the Arabica harvest has shown an unusual seasonal pattern, with the first phase producing less than the later months, reversing typical output trends. Other origins, including Java, Sulawesi, Bali and Flores, are expected to follow normal harvesting schedules but continue to face weather-related disruptions. Furthermore, the Indonesia coffee harvest 2026 is expected to show diverse patterns across these regions.

Despite lower production, quality has been supported by improved post-harvest attention. For coffee traders, the Indonesia coffee harvest 2026 outcomes will be essential to forecast quality and supply for the next cycle.

“Quality has been very good so far. With less production, processing capacity is less strained and each batch can receive full attention,” said Daniel Shewmaker, Managing Director at Sucafina Indonesia. On another note, coffee experts continue to anticipate fresh details about the harvest for Indonesia in 2026.

Robusta harvesting is underway in Sumatra at lower and mid elevations, with other regions to follow in the coming months. Output is also expected to decline due to persistent rainfall, an unusually large fly crop and an earlier-than-usual start to the season. Heavy rains are also complicating drying conditions across key areas, which could affect the Indonesia harvest for coffee in 2026.

Shewmaker said frequent rainfall was creating challenges for post-harvest processing. Indonesian coffee harvest 2026 analysis will be vital for understanding these processing difficulties.

At the same time, input costs are expected to rise later in the year, particularly fertiliser prices, which are being affected by volatility in global energy markets and geopolitical tensions. Notably, these factors may converge during the Indonesia 2026 coffee harvest season.

Sucafina Indonesia said it has expanded direct sourcing in Aceh, northwest Sumatra, increasing access to traceable coffee lots as part of efforts to strengthen supply chain coverage. This expansion is linked to the company’s response to the anticipated Indonesia coffee harvest trends in 2026.

The company also highlighted ongoing sustainability initiatives in Java and other producing regions, including farmer income programmes, savings groups, composting projects and access to agricultural inputs. Indonesia’s coffee harvest for 2026 will serve as a benchmark for these initiatives.

Early indicators from Sumatra suggest improved flowering conditions earlier this year, which could support a stronger main Arabica harvest beginning in October 2026, the company said. Overall, the Indonesia coffee harvest 2026 is likely to be memorable for its challenges and opportunities.

 

Indian Coffee in April: 4 Key Shifts Shaping the Global Market

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Dubai – Qahwa World

The Indian coffee market has experienced significant movement in recent weeks. Data through April 21, 2026, reveals record-breaking export figures and a strategic pivot in global demand. Here are the four primary shifts currently defining the sector:

  • 1. Record-Breaking Export Momentum

India’s coffee exports have reached a historic milestone, surpassing $2.1 billion for the 2025–26 fiscal year. Early data from January 1 to April 21 shows total provisional exports of 159,325 metric tonnes, a substantial increase from the 127,024 tonnes recorded during the same period last year. This surge is driven by a combination of higher global realizations and a robust appetite for Indian origins.

  • 2. Robusta Dominance and Value-Add Growth

Robusta continues to anchor the export volume, particularly the “Robusta Cherry” variety, which saw shipments exceed 68,000 tonnes. Notably, there is a clear structural transition toward value-added products. Instant coffee now accounts for approximately 35–40% of total export volume, signaling India’s successful push to be recognized as a manufacturer of processed coffee rather than just a raw commodity supplier.

  • 3. Price Correction vs. Supply Tightness

Arabica prices have undergone a short-term correction, trading near 289 USc/lb—a decline of roughly 5–6% from recent highs. Conversely, Robusta prices remain firm due to tight global supply. This price gap has led many international buyers to lock in Indian Robusta positions early, utilizing it as a high-quality, cost-effective balancing origin for global blends.

  • 4. Strategic Shift Toward Premium GI Origins

India is aggressively promoting its GI-tagged (Geographical Indication) coffees, such as those from Chikkamagaluru and Bababudangiri, to elevate its global brand positioning. This move toward premiumization comes as producers face increasing climate variability. Farmers are increasingly adopting climate-resilient varieties and adaptive practices to protect flowering and yields against irregular rainfall patterns in key regions like Kodagu.

Iran War Drives Coffee Prices Higher as Supply Risks Intensify

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Dubai – Qahwa World

Coffee futures rose sharply on Wednesday, hitting a 3.5-week high as markets reacted to escalating disruptions linked to the Iran war and concerns over global supply chains.

The main driver of the rally was growing uncertainty around the Strait of Hormuz, a critical global shipping route. Traders fear that prolonged conflict could keep the passage restricted, pushing up shipping costs, insurance premiums, fuel expenses, and overall logistics costs for coffee exporters and importers.

At the same time, tightness in robusta supply added upward pressure on prices, with ICE inventories recently falling to their lowest level in more than a year.

However, the broader market picture remains mixed. Arabica coffee had recently slipped to a seven-week low due to expectations of a very large Brazilian crop, with multiple forecasts pointing to a record harvest in the 2026/27 season. Larger projected global surpluses in the coming year are also seen as a long-term limiting factor for prices.

On the supply side, Vietnam continues to support global availability through strong export volumes, reflecting higher production levels in the world’s largest robusta-producing country. Meanwhile, Brazil’s export figures have shown recent declines compared with last year, and uneven rainfall in key growing regions is raising some concern about yield stability.

Longer-term projections from agricultural agencies still point to rising global production, particularly in robusta coffee, while arabica output is expected to decline. Even so, global ending stocks are forecast to tighten slightly in future seasons.

Overall, coffee markets are being pulled between short-term geopolitical disruption linked to the Iran war and longer-term expectations of strong global supply growth.

Record Brazil Crop Expectations Weigh on Coffee Prices Despite Supply Tightness

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Coffee markets are drifting lower, weighed down by mounting expectations of a very large crop in Brazil, even as supply-side tensions prevent sharper declines.

Arabica futures have slipped to their weakest levels in several weeks, reflecting growing confidence among analysts that Brazil’s next harvest could reach record territory. Forecasts from firms such as Marex Group, Sucafina, and StoneX all point toward a historically large 2026/27 crop clustered in the mid-70 million bag range. If realized, that would mark a significant year-on-year increase and help expand the global coffee surplus.

The supply outlook is also being shaped by developments in Vietnam, the world’s leading robusta producer. Export volumes have surged, with early-year shipments showing strong annual growth. Production is likewise expected to rise, potentially reaching a multi-year high, adding further pressure on prices.

Yet the market narrative is not entirely bearish. Tight inventories are offering some support, particularly for robusta, where exchange-monitored stockpiles have dropped to their lowest level in over a year, highlighting ongoing short-term supply constraints.

Geopolitical tensions are adding another layer of complexity. Disruptions linked to the Strait of Hormuz have pushed up freight and insurance costs, complicating global trade flows and increasing expenses for coffee importers and roasters.

Meanwhile, export data from Cecafé and Brazil’s trade authorities show a decline in March shipments compared to last year, lending some support to prices. Weather concerns also persist in key regions such as Minas Gerais, where below-average rainfall could still impact yields.

Global institutions, including the International Coffee Organization and the USDA Foreign Agricultural Service, continue to point to a nuanced outlook: overall production may rise, but with diverging trends between arabica and robusta, and tightening stock levels.

Taken together, the coffee market is navigating a delicate balance between expectations of abundant future supply and the realities of present-day constraints.

Coffee Prices Rise Amid Supply Concerns and Shipping Disruptions

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Coffee futures moved higher, supported by growing concerns over global supply disruptions and tightening inventories. Arabica and robusta contracts both posted gains, with robusta showing stronger momentum.

A key driver behind the price increase is rising tension around the Strait of Hormuz. Reports of shipping disruptions have heightened concerns about global trade flows, leading to increased freight costs, insurance premiums, and fuel expenses. These factors are adding pressure on coffee importers and roasters, contributing to upward price movement.

Robusta prices are receiving additional support from declining exchange inventories, which have dropped to their lowest level in over a year. This signals tighter short-term availability in the market.

However, expectations of a large upcoming harvest in Brazil are limiting stronger price rallies. Several industry forecasts point to a record crop for the 2026/27 season, with projections consistently above 75 million bags. At the same time, estimates suggest a significant global surplus could emerge in 2026, potentially the largest in several years.

Vietnam’s export performance is also weighing on the market, particularly for robusta. Shipments have increased notably in early 2026, following strong export growth in the previous year. Production in Vietnam is also expected to rise, reaching multi-year highs, which could further ease supply constraints.

On the other hand, reduced exports from Brazil are offering some support to prices. Recent data shows a decline in shipments compared to last year, tightening near-term availability in the global market.

Weather conditions in Brazil remain another important factor. Below-average rainfall in key growing regions, particularly Minas Gerais, has raised concerns about crop yields, adding a bullish element to price outlooks.

Looking at the broader picture, global export volumes have shown slight weakness, while production forecasts indicate modest overall growth. Arabica output is expected to decline, while robusta production is projected to increase significantly. Meanwhile, global coffee inventories are forecast to shrink, suggesting that supply pressures may persist despite higher production in some regions.

Brazil’s Coffee Reality: When Climate Pressure Collides With Market Demand

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This analysis is based on reporting first published by Dialogue Earth and written by Kevin Damasio. It has been adapted and republished by Qahwa World.

In the hills of Minas Gerais, where much of the world’s Arabica coffee is grown, a quiet transformation is underway. What was once a cycle of seasonal uncertainty has become a continuous struggle shaped by climate instability and shifting global demand.

This is no longer just a farming challenge. It is a defining moment for the future of coffee.

From Climate Variability to Climate Disruption

For generations, Brazilian coffee farmers adapted to occasional droughts, frosts, and irregular rains. Today, those events are no longer exceptions. They are part of a persistent pattern.

Longer dry periods, rising temperatures, and unpredictable rainfall are disrupting the biological rhythm of coffee itself. Flowering cycles are affected. Bean development becomes uneven. Yields lose consistency.

In regions like southern Minas Gerais, farmers are not asking if the weather will affect production. They are asking how severe the impact will be each year.

Scientific projections reinforce what farmers already experience on the ground. A significant share of Brazil’s Arabica-growing land faces the risk of becoming economically unviable in the coming decades if warming trends continue.

High Prices, Fragile Foundations

At the global level, coffee prices have surged as supply tightens. Brazil continues to generate record export revenues, even as shipment volumes fluctuate.

But this apparent strength hides a more fragile reality.

Higher prices are not translating into long-term security for producers. The cost of keeping coffee trees productive is rising. Irrigation systems, soil management, and climate-resistant varieties require investment. Losses from extreme weather events reduce financial resilience.

For many farmers, especially smallholders, the margin between survival and loss is narrowing.

The market is rewarding scarcity, but the conditions behind that scarcity are weakening the system that produces coffee.

The Retreat From Organic

One of the most telling shifts is happening in the field. Organic coffee production, once a growing segment, is under pressure.

Organic methods demand more labor, stricter management, and often higher costs. Under stable conditions, these systems can deliver value through quality and certification premiums. Under climate stress, they become harder to sustain.

As a result, some farmers are returning to conventional practices to secure more predictable yields. Even when they continue to limit chemical use, the shift reflects a deeper tension between sustainability and economic survival.

This raises an important question for the global coffee industry. Can sustainability commitments hold when producers face increasing climate risk and financial pressure?

Adaptation Becomes a Daily Practice

Across Minas Gerais, adaptation is no longer a long-term strategy. It is part of daily decision-making.

Farmers are replanting with more resilient Arabica varieties. They are improving soil cover to retain moisture. They are installing protective systems against hail and excessive sun.

Tree planting is gaining ground as a practical response. Shade reduces heat stress, stabilizes production, and creates microclimates that are more forgiving under extreme conditions.

Yet adaptation comes at a cost. Not every producer has equal access to credit, technical knowledge, or time to experiment. This creates a widening gap between those who can adjust and those who struggle to keep up.

Agroforestry and the Search for Balance

Among the emerging approaches, agroforestry stands out as both a return to coffee’s origins and a potential path forward.

By integrating trees, crops, and ecological processes, agroforestry systems aim to recreate the natural environment in which Arabica evolved. These systems can improve soil health, regulate water cycles, and reduce exposure to extreme weather.

Early results suggest strong potential in terms of resilience and quality. However, productivity gains are not always immediate, and management is more complex.

For many farmers, the question is not whether agroforestry works, but whether it is economically viable in the short term.

Without stronger institutional support, technical guidance, and market incentives, adoption is likely to remain limited.

A Changing Demand Landscape

While production faces mounting pressure, demand continues to expand.

Asia is becoming an increasingly influential force in global coffee consumption. Countries such as China, India, Indonesia, and Vietnam are reshaping how coffee is consumed, marketed, and valued.

For Brazilian producers and cooperatives, this shift offers new opportunities. It also introduces new expectations around volume, consistency, and price competitiveness.

This creates a delicate balance. Expanding into new markets may require scaling production, while climate realities are pushing toward more cautious and diversified farming systems.

The Future Is Being Rewritten in the Field

What is happening in Minas Gerais reflects a broader transformation across the global coffee sector.

Climate change is no longer a distant threat. It is actively redefining how coffee is grown. At the same time, market dynamics continue to evolve, creating both opportunity and pressure.

Farmers are responding with a mix of resilience, experimentation, and compromise. Some invest in new technologies. Others return to conventional methods. A few explore more complex ecological systems.

There is no single path forward.

What is clear is that the future of coffee will not be shaped by price alone. It will depend on how well the industry supports those at its foundation, the farmers who are adapting in real time to an increasingly uncertain environment.

For coffee, this is not just a moment of challenge. It is a moment of redefinition.

March 2026 Coffee Market Report: Global Prices Rebound Amid Geopolitical Tension

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Global Coffee Market Report: March 2026

An In-Depth Expert Analysis by an Independent Journalist – Based on the Official ICO Coffee Market Report

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The global coffee market experienced one of its most dramatic and multifaceted months in recent memory during March 2026. After three consecutive months of steady price erosion, the ICO Composite Indicator Price (I-CIP) staged a decisive rebound, averaging 273.70 US cents/lb, a solid 2.3% increase from February’s 267.57 US cents/lb. This recovery was not driven by traditional supply fundamentals alone. Instead, it was propelled by an abrupt and powerful geopolitical shock that temporarily overrode the market’s otherwise bearish supply outlook. The result was a case study in how external macro forces can intersect with coffee-specific dynamics to create extreme short-term volatility while leaving longer-term questions unresolved.

The Strait of Hormuz Crisis: A Geopolitical Black Swan for Commodities

The catalyst arrived on 4 March when the Strait of Hormuz was declared closed to vessels allied with the United States amid escalating conflict in the Middle East. Few waterways are as strategically vital: roughly 25% of the world’s seaborne oil trade and nearly 20% of global liquefied natural gas exports transit this narrow passage. The immediate consequences rippled far beyond energy markets. Brent crude prices breached $100 per barrel within days. Bunker fuel, container freight rates, and marine insurance premiums spiked simultaneously. Coffee traders, already navigating a complex supply picture, responded with aggressive risk-on buying.

You may read : ICO February 2026 Report: Has the Inflationary Wave Receded?

The ICO report highlights the dual impact on the sector. In the short term, higher shipping costs and energy expenses added upward pressure on physical coffee premiums. In the longer term, the disruption threatened fertilizer supply chains. The Gulf region is a major global fertilizer producer, and between one-quarter and one-third of the entire global fertilizer trade, including up to one-third of nitrogen fertilizers such as urea, passes through the strait. While the current 2025/26 crop cycle was largely insulated as most fertilizers had already been applied, any prolongation of the blockade would create risks for the 2026/27 season. This layered uncertainty injected a significant risk premium into coffee futures and physical markets.

March in Four Distinct Phases: A Masterclass in Market Psychology

Phase 1 – Geopolitical Rally (2–9 March): The month opened with the I-CIP at 267.40 US cents/lb. Within five trading days of the blockade announcement, risk-premium buying propelled prices to 278.77 US cents/lb, a 4.3% surge. The rally reflected surging energy costs, freight rates, and insurance premiums, which created a cost-push narrative embraced by coffee bulls.

Phase 2 – Sharp Correction (10–13 March): The market reversed sharply. On 10–11 March the I-CIP fell from 276.01 to 267.19 US cents/lb. The trigger was fundamentals. Leading brokerages Marex Group Plc and Sucafina released forecasts for Brazil’s 2026/27 crop at 75.9 million bags and 75.4 million bags respectively. By 13 March the I-CIP reached its monthly low of 265.50 US cents/lb. Risk appetite weakened further as broader financial markets rotated toward safe-haven assets.

Phase 3 – Stabilization and New Rally (14–24 March): Prices stabilized in the 269–271 US cents/lb range. Mixed signals emerged, including reports of limited vessel traffic through the Strait and persistent backwardation in the futures curve, indicating continued tightness in nearby supply.

Phase 4 – Late-Month Spike and Selloff (25–30 March): The rally faded as bearish catalysts returned. Rabobank reiterated its forecast of an 8.64 million-bag global surplus for 2026/27. Selling pressure intensified, and the month closed weaker despite the overall monthly gain.

This four-phase structure highlights a market shaped by competing forces: geopolitical risk provided temporary support, while expectations of record production capped upside momentum.

Divergent Performance Across Coffee Groups

  • Colombian Milds: +2.0% to 337.45 US cents/lb
  • Other Milds: +4.0% to 334.34 US cents/lb
  • Brazilian Naturals: +3.9% to 320.51 US cents/lb
  • Robustas: –1.6% to 176.77 US cents/lb

The London Robusta contract fell 2.5% to 161.91 US cents/lb, while New York Arabica futures rose 0.5% to 290.18 US cents/lb. Differentials reflected this divergence. The Colombian Milds–Other Milds gap narrowed from 9.54 to 3.12 US cents/lb. The Brazilian Naturals–Robustas gap widened to 143.74 US cents/lb, and the Other Milds–Robustas gap expanded to 157.57 US cents/lb. The arbitrage between London and New York futures increased to 128.27 US cents/lb.

You may also read: Global Coffee Market Roadmap—January 2026

Intra-day volatility eased slightly, with the I-CIP volatility falling to 9.8%. Robustas volatility rose to 10.9%. Certified stocks showed contrasting trends: London Robusta stocks contracted 10.7% to 0.66 million bags, while New York Arabica stocks increased 17.7% to 0.61 million bags.

February 2026 Export Data: The Underlying Supply Reality

While March prices reacted to geopolitics, February trade data revealed structural supply pressure. Global green-bean exports fell 9.0% year-on-year to 9.79 million bags. Total exports of all forms of coffee declined 5.7% to 11.46 million bags.

Regional Breakdown (All Forms of Coffee)

  • Asia & Oceania: –4.7% to 4.45 million bags. Vietnam’s exports fell 14.9% to 2.76 million bags due to the timing of Tết (Vietnamese Lunar New Year), which reduced working days. India partially offset this with a 38.5% increase.
  • South America: –21.8% to 3.61 million bags. Brazil and Colombia recorded significant declines in both exports and production.
  • Caribbean, Mexico & Central America: +30.0% to 1.98 million bags. Honduras led gains due to harvest timing shifts caused by previous weather disruptions.
  • Africa: +5.9% to 1.43 million bags, driven by Côte d’Ivoire.

Arabica’s share of total green-bean exports for the first five months of coffee year 2025/26 declined to 60.9% from 65.1% a year earlier.

Processed coffee exports showed strength, with soluble coffee rising 18.0% to 1.6 million bags and roasted exports increasing 85.1% from a low base.

Supply-Demand Balance: A Surplus on the Horizon

The ICO supply-demand balance for the coffee year beginning October 2024 shows world production at 177.51 million bags, up 5.2% year-on-year. Consumption rose 1.4% to 175.07 million bags. This results in a surplus of 2.44 million bags, marking a shift toward oversupply conditions.

Expert Perspective: What This Means for the Industry

March 2026 demonstrated the coffee market’s sensitivity to external shocks even in a structurally supply-heavy environment. Geopolitical developments provided temporary price support, but underlying fundamentals continued to reflect expectations of abundant supply, particularly from Brazil’s projected 2026/27 crop.

Input costs remain a key variable, particularly fertilizer supply chains linked to the Strait of Hormuz. Any prolonged disruption could influence production costs and future output. Meanwhile, widening Arabica–Robusta differentials and inter-market arbitrage opportunities reflect shifting trade dynamics across futures markets.

Conclusion

The March 2026 coffee market absorbed a significant geopolitical shock while maintaining its broader supply-driven trajectory. The ICO Composite Indicator Price rose 2.3%, halting a three-month decline. However, volatility and late-month weakness reinforced the dominance of supply expectations in shaping market direction. Attention now turns to developments affecting logistics, input costs, and the 2026/27 production cycle.

All data, figures, and phase descriptions are drawn directly and exclusively from the International Coffee Organization’s official Coffee Market Report – March 2026. Analysis and contextual commentary are the independent assessment of the author.

 

Strength in the Brazilian Real Boosts Coffee Prices

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Coffee futures moved higher on Friday, supported by currency strength and supply dynamics. May arabica coffee (KCK26) rose by +6.40 points (+2.18%), while May ICE robusta coffee (RMK26) gained +14 points (+0.42%).

Arabica prices reached a one-week high, while robusta rebounded from its lowest level in 8.5 months in nearby futures. The rally was largely driven by the appreciation of the Brazilian real, which climbed to a two-year high against the US dollar. A stronger real tends to discourage export selling by Brazilian producers, tightening global supply.

Supply Trends and Inventory Movements

Tight robusta supplies continue to support prices. ICE-monitored robusta inventories declined to 3,977 lots, marking a 1.25-year low. In contrast, arabica inventories have increased, limiting price gains. ICE arabica stocks rose to 585,621 bags on March 18, the highest level in more than six months.

Shipping Disruptions Impact Global Trade

The closure of the Strait of Hormuz has disrupted global shipping routes, tightening coffee supplies worldwide. The disruption has increased freight rates, insurance costs, and fuel expenses, raising overall costs for coffee importers and roasters.

Weather Conditions in Brazil Support Prices

Weather conditions in Brazil are also providing support. Somar Meteorologia reported that Minas Gerais, the country’s largest arabica-growing region, received 11.7 mm of rainfall last week, representing only 47% of the historical average. Below-normal rainfall may affect crop development and support prices.

Record Crop Expectations Weigh on Market Sentiment

Despite current support factors, expectations of a record Brazilian coffee crop continue to pressure the market. On March 19, Marex Group Plc projected Brazil’s 2026/27 coffee production at 75.9 million bags, exceeding Sucafina’s estimate of 75.4 million bags and marking a 15.5% year-on-year increase.

On March 12, StoneX raised its forecast to 75.3 million bags, up from a previous estimate of 70.7 million bags. The firm also expects the global coffee surplus to expand to 10 million bags in 2026, compared to 1.8 million bags in 2025, representing the largest surplus in six years.

Vietnam Export Growth Pressures Robusta

Rising exports from Vietnam, the world’s largest robusta producer, are weighing on prices. Vietnam’s National Statistics Office reported that coffee exports in the first quarter of 2026 increased by 14% year-on-year to 585,000 metric tons.

In 2025, exports rose by 17.5% to 1.58 million metric tons. Production for the 2025/26 season is expected to increase by 6% to 1.76 million metric tons (29.4 million bags), reaching a four-year high.

Decline in Brazilian Exports Offers Support

Recent export data from Brazil provided additional support to prices. Cecafe reported that green coffee exports in February fell by 27% year-on-year to 2.3 million bags. Meanwhile, Brazil’s Trade Ministry reported a 31% decline in March exports to 151,000 metric tons.

Recent Price Trends and Global Outlook

Coffee prices declined sharply in February, with arabica falling to a 16.75-month low on February 24 due to expectations of strong Brazilian supply.

Brazil’s crop agency Conab projected on February 5 that 2026 coffee production would rise by 17.2% year-on-year to a record 66.2 million bags. Arabica output is expected to increase by 23.2% to 44.1 million bags, while robusta production is forecast to grow by 6.3% to 22.1 million bags.

Rabobank reported on March 4 that global coffee production for the 2026/27 season is expected to reach a record 180 million bags, about 8 million bags higher than the previous year.

Global Trade and Production Forecasts

The International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (October to September) declined by 0.3% year-on-year to 138.658 million bags.

The USDA’s Foreign Agriculture Service (FAS) projected in its December 18 report that global coffee production for 2025/26 will increase by 2.0% to a record 178.848 million bags. Arabica production is expected to decline by 4.7% to 95.515 million bags, while robusta output is forecast to rise by 10.9% to 83.333 million bags.

FAS also estimates that Brazil’s 2025/26 coffee production will fall by 3.1% to 63 million bags, while Vietnam’s production will increase by 6.2% to 30.8 million bags. Ending stocks for the 2025/26 season are projected to decline by 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25.

Brazil Crop Expectations Weigh on Coffee Prices

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Coffee prices remain under pressure as the market continues to digest expectations of a large upcoming crop in Brazil. May arabica coffee declined by 0.65%, while May robusta slipped 0.69%, extending recent losses.

Arabica futures recently touched a three-week low, while robusta fell to its weakest nearby level in eight months. The downward trend is largely driven by forecasts pointing to record production in Brazil. Estimates from multiple analysts suggest the 2026/27 crop could reach between 75.3 and 75.9 million bags, representing a significant year-on-year increase.

At the same time, projections indicate a widening global coffee surplus. Estimates suggest the surplus could expand to 10 million bags in 2026, up sharply from 1.8 million bags in 2025, marking the largest surplus in six years.

Additional pressure is coming from Vietnam, the world’s leading robusta producer. Coffee exports from Vietnam rose 14% year-on-year in the first quarter, reaching 585,000 metric tons. Full-year exports in 2025 increased by 17.5%, while production for the 2025/26 season is expected to rise 6% to a four-year high.

Despite these bearish factors, some elements are offering support to prices. Weather conditions in Brazil remain a concern, with below-average rainfall in key growing regions such as Minas Gerais. Recent data shows rainfall at just 47% of the historical average, raising questions about crop development.

Supply dynamics are also mixed. Robusta inventories have tightened, with exchange-monitored stocks falling to a 15-month low. In contrast, arabica inventories have increased, reaching their highest level in over six months, adding further pressure to that segment of the market.

Export data from Brazil has provided some price support. Green coffee exports fell 27% year-on-year in February, while March exports dropped 31%, indicating a slowdown in shipments.

Looking back, coffee prices already experienced a sharp selloff in February, when arabica dropped to a 16.75-month low amid early signs of a strong Brazilian crop. Brazil’s official crop agency has projected a substantial increase in production, while global output is also expected to reach record levels in the 2026/27 season.

On a broader scale, global coffee production is forecast to rise modestly in 2025/26, driven by strong growth in robusta output, particularly from Vietnam. However, ending stocks are expected to decline, suggesting that supply tightness could still emerge in certain segments of the market.