International coffee prices saw a sharp decline in September, falling by an average of 8.7%. This significant drop is largely attributed to a bumper harvest in Brazil and mounting expectations of a substantial global surplus in the coming coffee year.
Brazil's Record Crop Fuels Price Decline
According to the International Coffee Organization (ICO), its composite indicator price averaged 262.18 cents per pound in September, down from 287.29 cents in August. Brazil, the world's largest coffee producer, had nearly completed its harvest by late August, with consultancy Safras & Mercado reporting 97% completion. The Brazilian National Supply Company (CONAB) raised its estimate for the country's 2026 coffee crop to a record 67.6 million bags.
While the sheer volume of supply pressured prices downwards, the ICO noted that rain during the harvest period impacted bean quality, leading to uneven availability across different grades.
Widespread Price Decreases Across Coffee Varieties
The market weakness was broad, with all four group indicators tracked by the ICO showing declines in September:
- Colombian Milds fell 8.1% to an average of 356.15 cents per pound.
- Other Milds decreased 8.8% to 329.44 cents per pound.
- Brazilian Naturals dropped 9.9% to 290.19 cents per pound.
- Robusta prices saw a 7.3% decline, settling at 167.49 cents per pound.
The price difference between Colombian Milds and Other Milds widened slightly by 2.1%, while the arbitrage between the London and New York futures markets narrowed by 13.2%.
Global Exports Rise, Surplus Anticipated
Global green coffee bean exports increased by 15.6% year-on-year in August, reaching 10.94 million bags. This growth was observed across most coffee groups, with Robusta shipments rising 22.4% and Brazilian Naturals exports up 21.3%. However, exports of Colombian Milds saw a 5.6% decline.
Looking ahead, the ICO projects global coffee production to increase by 4.4% to 183.6 million bags in the 2025-26 coffee year (October-September). Conversely, global consumption is expected to dip by 0.8% to 180.6 million bags. Based on these estimates, the organization forecasts a global coffee surplus of 3 million bags for the upcoming year, marking an end to four consecutive years of market deficits.