Arabica Coffee Futures Drop to Lowest Level in Over Two Months Due to Improved Supply Outlook

New York | EcoPulse24

Arabica coffee futures dropped to around $3.80 per pound, reaching their lowest level since October 10, amid pressures from improved global supply expectations, especially from Brazil, the world's largest coffee producer.

According to a report from Hedgepoint Global Markets on December 12, Brazil's coffee production for the 2026/2027 season is expected to range between 71 and 74.4 million bags, supported by favorable rainfall during October and November, which enhanced the flowering process for Arabica crops. The report also noted the continued strength of Robusta production, supporting the replenishment of global coffee stocks.

Arabica production forecasts are estimated between 46.5 and 49 million bags, compared to approximately 37.7 million bags harvested in the 2025/2026 season, while Robusta production is expected to range between 24.6 and 25.4 million bags.

In a related note, the Brazilian agricultural forecasting agency Conab raised its total coffee production estimate for the 2025 season by 2.4% to 56.54 million bags, an increase of 4.3% compared to 2024, marking the third-largest production on record, despite being a traditionally low-production year in the Arabica crop cycle.

Additional factors contributing to price pressure include the delay in implementing the European Union's deforestation prevention law, along with expectations of increased coffee shipments to the United States following the removal of certain customs restrictions, raising concerns about oversupply in global markets.

These developments reflect a shift in the risk balance in coffee markets, as improved supply now overshadows prices after a period of severe volatility in recent months.