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Global coffee production is projected to reach a record 180 million 60-kg bags in the 2026/27 season (Rabobank), up from 178.8 million bags in 2025/26 (USDA FAS). After a 50% price surge in 2025, the World Bank projects Arabica prices to fall 13% in 2026 and 5% in 2027 as Brazil, Vietnam, and Ethiopia all post higher yields. For importers, this supply surplus creates a strategic buying window: more availability, weaker differentials, and better negotiating leverage, especially for Ethiopian specialty lots where quality premiums remain firm.
Coffee prices are falling after reaching all-time highs in early 2025, and the reason is straightforward: the world is producing more coffee than ever. Arabica futures, which hit 400 cents per pound in February 2025, have retreated sharply as Brazil forecasts a record crop and Vietnam ships robusta at volumes not seen in four years. For green coffee importers and roasters, this reversal reshapes procurement math, contract timing, and origin-allocation decisions for the 2026/27 buying season.
This guide examines the data behind the production-price disconnect, breaks down the outlook for each major producing country, and offers concrete buying strategies for importers sourcing Ethiopian green coffee in a market moving from deficit to surplus.
Three major forecasting bodies confirm the trend. Global coffee output is climbing, and the numbers point toward a supply surplus beginning in the 2026/27 crop year.
| Source | 2024/25 Forecast | 2025/26 Forecast | 2026/27 Forecast |
|---|---|---|---|
| USDA FAS (Dec 2025) | 175.4M bags | 178.8M bags (+2.0%) | Not yet released |
| World Bank (Oct 2025) | 175.4M bags | ~179M bags | Growth expected |
| Rabobank (Feb 2026) | ~172M bags | ~178M bags | 180M bags (record) |
The USDA's Foreign Agricultural Service projected world coffee production for 2025/26 at a record 178.848 million bags in its December 2025 biannual report. Within that total, arabica output is forecast at 95.5 million bags and robusta at 83.3 million bags (+10.9% year-on-year). Rabobank goes further, projecting 180 million bags for 2026/27 and a surplus of 7 to 10 million bags, the first meaningful oversupply since the 2019/20 season.
A 7 to 10 million bag surplus, if realized, represents roughly 4% to 6% of total global consumption (approximately 170 million bags annually). In practical terms, that is 420,000 to 600,000 metric tonnes of green coffee above what the market absorbs. For comparison, Ethiopia's entire annual production is about 11.6 million bags. The projected surplus is nearly equivalent to Ethiopia's full output.
The price correction did not happen overnight. It follows one of the sharpest rallies in coffee market history. Understanding what drove prices up helps explain why they are now moving down.
Arabica futures on ICE surpassed 400 cents per pound in February 2025, a price not seen in the commodity's modern trading history. Three factors converged: severe drought in Brazil's Minas Gerais state during the 2024 growing season cut short the arabica crop; climate-related disruptions reduced yields across Vietnam and Indonesia; and speculative positioning amplified upward momentum. ICE-monitored arabica inventories fell to a 1.75-year low of 396,513 bags in November 2024, signaling genuine physical tightness.
By mid-2025, the fundamentals shifted. Sufficient rainfall returned to Brazil's coffee belt. Vietnam posted a rebound harvest. Colombia, after a disappointing January 2025 (production fell 34% year-on-year to 893,000 bags), projected a full recovery for the second half of its 2025/26 season. Meanwhile, global coffee demand, which grows at a steady 1.5% to 2.5% annually, did not accelerate enough to absorb the incoming supply.
The World Bank's Commodity Markets Outlook (October 2025) quantified the expected correction: Arabica prices projected to fall 13% in 2026 and an additional 5% in 2027 after rising 50% in 2025. Robusta is expected to ease more gradually, declining 2% in both 2026 and 2027 after a 10% increase in 2025.
| Coffee Type | 2025 Price Change (y/y) | 2026 Forecast | 2027 Forecast |
|---|---|---|---|
| Arabica | +50% | -13% | -5% |
| Robusta | +10% | -2% | -2% |
Source: World Bank Commodity Markets Outlook, October 2025.
ICE-monitored arabica inventories recovered from 396,513 bags (November 2024) to 461,829 bags by early January 2026, a 3.75-month high. ICE robusta inventories similarly climbed from a 14-month low of 4,012 lots (December 2024) to 4,662 lots (January 2026). Rising exchange stocks confirm that physical supply is rebuilding, supporting the bearish price trajectory.
The global surplus is not evenly distributed. Three countries are driving the supply increase; others present mixed or still-constrained outlooks.
Brazil remains the single most important variable in coffee price formation. On February 5, 2026, Conab (Brazil's national crop forecasting agency) projected Brazil's 2026 coffee production at a record 66.2 million bags, up 17.2% from the previous year. Arabica output is forecast at 44.1 million bags (+23.2%), while robusta (conilon) is projected at 22.1 million bags (+6.3%).
Sufficient rain in Minas Gerais (Brazil's largest arabica-growing state) has been the critical factor. Somar Meteorologia reported that Minas Gerais received 62.8 mm of rainfall in the week ending February 13, 2026, which was 138% of the historical average. This moisture has supported cherry development and is expected to translate into strong yields at harvest.
Brazil's arabica production alone (44.1 million bags) exceeds the entire combined output of Ethiopia, Colombia, and Kenya.
Vietnam, the world's largest robusta producer, is shipping aggressively. Vietnam's National Statistics Office reported January 2026 coffee exports surged 38.3% year-on-year to 198,000 metric tonnes. Full-year 2025 exports jumped 17.5% to 1.58 million metric tonnes. The USDA FAS projects Vietnam's 2025/26 production at 30.8 million bags, a four-year high (+6.2% year-on-year).
For importers blending robusta into commercial or espresso products, Vietnamese supply abundance pressures robusta differentials downward and gives buyers more room to negotiate terms.
Colombia's near-term picture is mixed. The National Federation of Coffee Growers reported that January 2026 production fell 34% year-on-year to 893,000 bags, a sharp decline attributed to weather irregularities. However, Colombia is expected to recover through its mid-year mitaca harvest, and the USDA projects full-year 2025/26 output to stabilize near 12 to 13 million bags. The World Bank specifically cites Colombia's production recovery as a key driver of projected Arabica price declines.
Indonesia's robusta production is also growing. Uganda, now Africa's largest coffee exporter by volume, continues to expand output. Together, these mid-tier producers add another 2 to 3 million bags of incremental supply to the global total, reinforcing the surplus trajectory.
Ethiopia is participating in the global production upswing. The USDA FAS projects Ethiopian coffee production for 2025/26 at a record 11.56 million 60-kg bags (approximately 694,000 metric tonnes), a 9% increase from the previous year. Area harvested is expected to expand to 790,000 hectares, with average yields rising to 0.88 metric tonnes per hectare.
| Metric | 2024/25 | 2025/26 (Forecast) | Change |
|---|---|---|---|
| Production | 10.6M bags | 11.56M bags | +9% |
| Area Harvested | ~760,000 ha | 790,000 ha | +3.9% |
| Average Yield | 0.84 MT/ha | 0.88 MT/ha | +4.8% |
| Exports (Forecast) | ~7.2M bags | 7.8M bags | +8.3% |
Source: USDA FAS Coffee Annual, June 2025; Commodity Board Europe.
Ethiopian coffee prices do not move in lockstep with the C-market. Several structural factors insulate Ethiopian specialty lots from the worst of global price declines:
Ethiopia's heirloom varieties produce flavor profiles (floral, citrus, berry) that cannot be replicated by Brazilian or Vietnamese coffees. Buyers pay for origin characteristics, not just a commodity grade.
A large share of Ethiopian exports are Grade 1 and Grade 2 specialty, priced on quality differentials rather than flat C-market benchmarks. Specialty differentials tend to hold even when the underlying futures contract drops.
Ethiopia consumes roughly 50% of its own production domestically, through the Ethiopian coffee ceremony and the growing domestic market. This absorbs supply internally and limits the exportable surplus.
Recent policy changes, including expanded direct export licensing (Directive 1106/2025), allow more producers and cooperatives to sell directly to international buyers. This adds traceability value but also tightens supply from the most sought-after washing stations.
The bottom line: while Ethiopian FOB prices may soften modestly as global prices retreat, they are unlikely to decline as sharply as Brazilian commercial-grade arabica. Importers should expect tighter differentials, not a collapse.
A market transitioning from deficit to surplus changes the procurement calculus. Here is what importers should expect in the 2026/27 buying season:
Falling prices do not automatically translate into better value. Importers who act strategically, rather than simply waiting for the bottom, will capture the best lots before opportunistic buyers absorb surplus supply.
Ethiopian specialty coffee (Grade 1 natural Guji, washed Yirgacheffe, Sidamo lots scoring 84+) is produced in limited volumes relative to global demand. Even in a surplus year, these lots sell out well ahead of commercial grades. Use the Ethiopian coffee harvest calendar to time your sample requests for Q1 (new crop arrivals from January through March).
If your procurement model allows, consider forward contracts that lock in current or near-term prices for delivery in Q3/Q4 2026. With Rabobank projecting continued price declines into 2027, fixed-price contracts signed in mid-2026 may offer attractive positioning.
A surplus market is the ideal time to expand your Ethiopian program beyond your core origin. If you currently buy only Yirgacheffe, request samples from Guji, Bombe (Sidama), or Limu. With more supply available, exporters are more willing to prepare small trial lots for new buyers.
When commodity-grade prices decline, the price gap between commercial and specialty narrows as a percentage of total landed cost. This is the moment to shift your program upmarket: replace a G4 Jimma commercial lot with a G2 Sidamo natural, or upgrade from standard G2 Yirgacheffe to a single-station G1 lot. Your cost per kilogram may increase marginally, but your cup quality jumps significantly.
Falling global prices and record Ethiopian production mean more availability, better allocation, and flexible terms for importers. Request pre-shipment samples from our current season offerings and lock in your program for 2026/27.
Coffee prices are declining because global production is reaching record levels while demand growth remains steady at 1.5% to 2.5% annually. Brazil projects a record 66.2 million bag crop, Vietnam's robusta exports surged 38%, and Rabobank forecasts a 7 to 10 million bag surplus for the 2026/27 season.
The USDA FAS estimates world coffee production at 178.8 million 60-kg bags for the 2025/26 season, equivalent to approximately 10.7 million metric tonnes. Rabobank projects this rising to a record 180 million bags in 2026/27. Brazil accounts for roughly 37% of global output, followed by Vietnam (17%) and Colombia (7%).
The World Bank projects Arabica prices to fall an additional 5% in 2027 after a 13% decline in 2026, assuming production recovery continues in Brazil and Colombia. However, this forecast depends on normal weather patterns. A drought or frost event in Brazil could reverse the trend rapidly.
Ethiopian specialty coffee prices are partly insulated from global declines because they trade on quality differentials rather than flat commodity benchmarks. Ethiopian FOB prices may soften modestly, but heirloom variety flavor profiles, high domestic consumption (about 50% of output), and strong specialty demand maintain premium levels relative to commercial arabica.
A surplus market creates favorable conditions for importers: better lot availability, more negotiating leverage on terms, and the opportunity to diversify origins or upgrade quality within existing budgets. Locking in supply during a surplus window, before a potential weather event re-tightens the market, is a sound procurement strategy.
About This Insight: Written by Ethio Coffee Import and Export PLC, an origin-connected Ethiopian coffee exporter with three decades of sourcing relationships across Yirgacheffe, Sidamo, Guji, Harar, Limu, and Jimma.