Daily Coffee Report 10/6/26
Daily coffee report
StoneX Coffee Team
- Coffee
Brazil Supply Surge Pushes Coffee Market Into Surplus Phase
By: Editorial Team, StoneX Media
Global coffee markets are undergoing a decisive shift as supply expansion begins to outweigh demand recovery. The transition follows several years of deficit-driven tightness that pushed prices to record highs in 2025. Market participants are now recalibrating expectations as new crop volumes enter global trade flows. This shift is raising important questions about price ceilings and the sustainability of recent market volatility.
Leonardo Rossetti, StoneX Brazil Market Intelligence Analyst, has conducted extensive field research across Brazil’s key producing regions in early 2026. His direct assessment of crop conditions and supply flows provides a timely perspective on how production dynamics in Brazil are reshaping global coffee markets.
Key Themes from the Discussion
- Global coffee production is projected at 182.5 million bags versus 172.5 million bags of consumption, creating a surplus of around 10 million bags.
- Brazil’s 2026 to 2027 harvest is estimated at 75.3 million bags, marking a 20.8 percent increase and a potential record.
- Improved supply from Brazil and Vietnam is shifting market sentiment from scarcity to abundance, capping price upside.
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Brazil Coffee Supply Surge Drives Global Surplus Formation
Brazilian coffee production is accelerating sharply in 2026, driving a structural shift in global supply dynamics. Rossetti highlights that "we are projecting 75.3 million bags for this season", reflecting a 20.8 percent increase and a potential all-time record. This surge is being supported by improved weather conditions, expanded planting areas, and stronger investment in crop management following high price incentives in 2025. As a result, global coffee supply is expanding faster than anticipated, increasing availability across key importing regions. This shift is contributing directly to the emergence of a global surplus and reinforcing downward pressure on prices.
Global Coffee Balance Turns Positive After Years of Deficits
The global coffee market balance is turning positive after several consecutive years of deficits that drove prices to historic highs. Rossetti explains that "we are projecting global production of 182.5 million bags against consumption of 172.5 million bags", creating a surplus of approximately 10 million bags. This reversal is significant because it signals a transition from scarcity-driven pricing to a more supply-driven market structure. Consequently, the surplus is expected to cap price rallies and reduce the likelihood of sustained upward momentum in 2026. While short term volatility may persist due to external shocks, the broader balance suggests a more constrained pricing environment ahead.
Frequently Asked Questions
Why are coffee prices falling in 2026?
Coffee prices are declining primarily due to improving global supply, led by a record Brazilian harvest and stronger production in Vietnam. This shift has moved the market from deficit into surplus.
How large is the projected global coffee surplus?
The global coffee market is expected to see a surplus of around 10 million bags in 2026, based on production of 182.5 million bags versus consumption of 172.5 million bags.
Can demand growth offset the supply increase?
Demand is expected to grow by about 2.5 percent, but this is not sufficient to match the pace of supply expansion, meaning surplus conditions are likely to persist.
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--- Written by Lindo Xulu, StoneX TV Journalist
--- Expert: Leonardo Rossetti, StoneX Brazil Market Intelligence Analyst
- Coffee
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