Annual Coffee Market Forecast for 2026
In 2025, the global coffee market found itself in the midst of a 'Perfect Storm' where climate crisis, geopolitical conflict, and trade barriers occurred simultaneously. Historic droughts in Brazil's Minas Gerais and poor harvests in Vietnam drove both Arabica and Robusta prices to historic highs.
The 2026 market enters a new phase beyond simple supply-demand recovery. ① La Niña climate transition, ② EUDR (Deforestation Regulation) 1-year implementation delay leading to short-term supply stabilization, ③ Structural logistics cost increases are all working in combination. The EU's EUDR 1-year delay decision has significantly reduced the possibility of regulatory supply shocks in 2026, but a 'high-cost era' where the cost of production itself has structurally increased will become the new normal.
2025 was a year when price levels stepped up a notch. Arabica futures broke through 400 cents per pound, staging the most powerful bull market since the 1970s. 'Panic Buying' dominated the market, and the traditional harvest-season price decline (Seasonality) pattern disappeared.
| Period | Arabica (¢/lb) | Robusta ($/ton) | Key Drivers |
|---|---|---|---|
| Feb 2025 | 440.85 (Peak) | 3,800~4,000 | Early Brazil drought concerns, aggressive speculative capital inflows |
| Jul 2025 | 320~350 | 4,200 | Vietnam harvest delays, logistics difficulties from Panama Canal slot reductions |
| Nov 2025 | 411.60 | 4,693 (Peak) | Minas Gerais rainfall at 49% of normal, US tariff issues |
"Paradox of Price: Plenty of Poverty"
"Fear of Profitable Bankruptcy (Cash Crunch)"
"Liquidity Crisis on Thin Ice"
Current Analysis: 2025/26 season Brazil Arabica production is estimated at 34.4-37.0 million bags (Volcafe-Conab), down about 10% from the previous year due to historically severe drought and extreme 40°C temperatures. Notably, Minas Gerais, which accounts for 70% of total production, recorded only 70% of average rainfall.
The 2026/27 crop is expected to increase due to the on-year cycle, but recovery potential is uncertain due to August 2025 frost damage (412,000 bags loss) and cumulative tree stress over 5 years.
| Scenario | Production Outlook | Price Impact | Target Range |
|---|---|---|---|
| Bull | 72M+ bags | -35 to -50¢ | 300-330¢/lb |
| Base | 68-70M bags | -10 to +10¢ | 350-380¢/lb |
| Bear | Below 65M bags | +30 to +60¢ | 410-440¢/lb |
Key Monitoring: Sep-Oct 2025 flowering period rainfall, Jun-Jul 2026 frost risk, Conab 1st estimate (May 2026).
Current Analysis: November 2025 ICE certified stocks are at 398,000 bags, a 1.75-year low. US roaster inventories were depleted during the tariff period, and even after tariff removal, logistics normalization will take 6-8 weeks. Historically, stocks below 500,000 bags have formed a structural premium of 20-40 cents.
Current Analysis: The November 20, 2025 Trump executive order removed tariffs from 50% to 0%. While this is a short-term price bearish factor, the supply chain distortion formed over 3 months (inventory depletion, contract cancellations) will persist through H1 2026.
Current Analysis: In November 2025, the EU Parliament approved a 1-year delay of EUDR implementation. This means the effective date for large companies is now December 30, 2026, and for SMEs June 30, 2027. This delay provides preparation time for origin countries and importers, but the fundamental requirements (geographic data, traceability) remain unchanged.
Market Impact: The EUDR delay means limited direct impact on the 2026 coffee market. However, as this is a delay not cancellation, the industry must continue building compliance systems. In the short term, continued imports of coffee from deforestation regions in Africa, Indonesia, and South America could be a supply increase factor.
Current Analysis: November 2025 exchange rate is 5.38. A weak Real incentivizes exports, while a strong Real suppresses them. 2026 consensus is the 5.40-5.80 range.
If a strong La Niña develops and prevents rain in southeastern Brazil during the September-October 2026 flowering period, consecutive poor harvests would be confirmed. In this case, Arabica futures could break 500 cents and enter uncharted territory.
Climate change has increased pest activity, with rising cases of resistant variety infections in Vietnam and Central America. If Vietnam's recovery expectations are dashed by leaf rust, the Robusta supply chain would face a critical blow.
If Panama Canal and Red Sea blockades overlap, severe Price Dislocation would result.
Based on comprehensive data analysis, here are three scenarios for 2026 Arabica (KC) prices.
While 2026/27 season supply surplus transition is likely, structurally higher production costs make a return to the cheap prices of the past unlikely.
Disclaimer: This report is market analysis based on publicly available information as of November 27, 2025, and is not investment advice. Coffee futures trading carries risk of principal loss. Past performance does not guarantee future returns.