Arabica Coffee Futures Hover Near 4-Month Lows as Supply Outlook Improves

Arabica coffee futures hovered around $3.40 per pound, maintaining levels close to their lowest since mid-August, as global supply outlooks improved and the entry of new crops continued to pressure prices.

According to market participants, the flow of freshly harvested beans remains a key factor weighing on prices, alongside nearly ideal weather in Brazil, the world's largest coffee producer, which has boosted expectations for a better crop next season.

A report from Itaú BBA noted that climate forecasts for late December and early 2026 look positive, coinciding with the sensitive flowering stage, with expected rainfall providing optimal conditions to support production during this critical period.

Despite better weather, limited global inventories and strong local and international demand have prevented a steep price drop, keeping the market relatively balanced.

Brazil’s output remains constrained by the legacy of five years of climate volatility and the biennial coffee crop cycle, limiting near-term supply growth. Nevertheless, projections indicate that global production could surpass consumption in the 2026/2027 season, with an anticipated surplus of nearly 7 million bags.