Daily Coffee Report 10/2/26
Daily coffee report
StoneX Coffee Team
- Coffee
Rabobank Sees Coffee Market Rebalancing as Record Production Drives Large 2026/27 Surplus
By: Alexis Rubinstein, Managing Editor - Coffee Network
CoffeeNetwork (New York) - The global coffee market could be on the verge of its most significant supply recovery in years, according to Rabobank's latest outlook, which projects a substantial surplus for the 2026/27 coffee year as production rebounds sharply across key origins, led by Brazil. The bank forecasts global coffee production at 181.7 million bags against consumption of 172.8 million bags, resulting in an anticipated surplus of 8.9 million bags.
The projected surplus marks a dramatic shift from the tight supply environment that has characterized the coffee market since 2021. Consecutive production shortfalls, weather-related disruptions, and strong post-pandemic demand depleted inventories throughout both producing and consuming countries, helping drive Arabica futures to record highs earlier this year. Rabobank argues that the coffee market is now transitioning from a period of scarcity toward one of rebuilding stocks and restoring supply chain resilience.
While an 8.9 million bag surplus may appear excessive at first glance, much of the additional production will likely be absorbed by the need to replenish inventories that have been steadily drawn down over recent years. Importers, roasters, traders, and consuming nations have largely operated on hand-to-mouth purchasing strategies due to elevated prices and limited availability. As larger volumes become available, particularly from Brazil, the market will likely see a replenishment of warehouse stocks at origin, destination inventories, and commercial supply pipelines that remain historically thin.
At the heart of Rabobank's optimistic outlook is Brazil, which is expected to produce approximately 73.3 million bags in 2026/27, one of the largest crops ever recorded. The forecast reflects the country's favorable "on-year" position within the biennial Arabica production cycle, alongside improved weather conditions and increased investment by growers who benefited from elevated coffee prices during 2024 and 2025.
Rabobank's forecast follows a comparatively balanced 2025/26 coffee year, in which global production is estimated at 172.6 million bags against demand of 171.4 million bags. While technically representing a small surplus, that season offered little opportunity to rebuild depleted inventories. Instead, much of the available supply was absorbed immediately by market demand, leaving stocks at relatively constrained levels and maintaining upward pressure on prices. The anticipated jump of more than 9 million bags in global production during 2026/27 therefore represents a potentially transformative development for the industry.
The shift in the supply outlook has already begun influencing futures markets. Coffee prices have trended lower over recent months as traders increasingly factor in the prospect of larger Brazilian supplies. Rabobank notes that speculative fund liquidation has accelerated the decline, though the bank has also cautioned that weather uncertainty and positioning changes could still generate periods of volatility.
Another important consideration is that global coffee demand has proven remarkably resilient despite historically high retail and wholesale prices. Rabobank's forecast assumes consumption of 172.8 million bags in 2026/27, representing continued growth from the previous year. If consumers continue absorbing higher coffee costs without significant demand destruction, part of the projected surplus could ultimately be absorbed more quickly than currently anticipated.
Alexis Rubinstein
Source: Rabobank
- Coffee
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Daily Coffee Report 10/1/26
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StoneX Coffee Team
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