Daily Coffee Report 11/2/26
Daily coffee report
StoneX Coffee Team
- Coffee
Indonesia's Coffee Weather Risk Is Shifting Just as the Market Turns Bearish
Alexis Rubinstein
Managing Editor - Coffee Network
CoffeeNetwork (New York) - As coffee futures markets focus increasingly on Brazil's large crop, rising exports, and forecasts for a global coffee surplus, a potentially important weather story is developing in Indonesia.
For much of the past year, concerns centered on excessive rainfall that damaged flowering, reduced fruit set, triggered flooding, and cut Indonesian coffee production. Those weather impacts are already reflected in current production estimates, with the USDA Foreign Agricultural Service forecasting Indonesia's 2026/27 coffee crop at 11.38 million bags, down 8% from the previous season. The majority of those losses occurred in the country's critical robusta-producing regions of southern Sumatra and Java.
What makes the situation noteworthy today, however, is that the weather pattern has changed dramatically. Instead of excessive rainfall, Indonesia is now experiencing increasingly dry conditions associated with a strong El Niño, raising fresh questions about the development of the next coffee crop.
The Damage to the Current Crop Has Already Been Done
The coffee losses currently being discussed throughout the trade largely stem from weather events that occurred months ago.
According to the latest USDA assessment, excessive rainfall during flowering and fruit development disrupted coffee production across major robusta areas in southern Sumatra and parts of Java. Heavy rains caused flowers to fall prematurely and washed away pollen before successful pollination could occur, ultimately reducing yields.
The impact was particularly severe because the affected areas represent the heart of Indonesia's robusta industry. Southern Sumatra, including Lampung, Bengkulu, and South Sumatra, accounts for roughly 80% to 90% of national robusta production. Sumatra overall represents approximately 60% of Indonesia's coffee-growing area.
Meanwhile, arabica-growing areas in Aceh and North Sumatra suffered flooding and landslides, with some plantations expected to require years to fully recover. The USDA cited local estimates showing approximately 12,000 hectares of coffee area damaged in Aceh alone.
Those weather events have already reduced the current crop and contributed to lower export expectations. The USDA projects green coffee exports at 7 million bags in 2026/27, while the Indonesian Coffee Exporters and Industries Association (AEKI) has also acknowledged weather-related production challenges despite continued international demand for Indonesian coffee.
The Weather Story Has Changed
While traders continue discussing the effects of excessive rainfall, current weather patterns suggest Indonesia may now be facing a different challenge.
Recent updates from BMKG, Indonesia's meteorological agency, indicate that a very strong El Niño is dominating conditions across much of the archipelago. The agency reported an exceptionally strong Niño 3.4 anomaly of approximately +2.83°C in late August and expects dry conditions to persist across many regions into the final months of the year.
According to BMKG's September outlook, about 88% of Indonesia is expected to experience below-normal rainfall. Large portions of southern Sumatra, including key coffee-producing districts in Lampung, Bengkulu, and South Sumatra, fall within areas forecast to receive below-normal precipitation.
BMKG further reported that many parts of southern Indonesia have experienced prolonged dry conditions, with some locations recording more than 60 consecutive days without measurable rainfall.
The most recent weather assessments suggest rainfall has been running below normal across much of Indonesia's coffee belt.
Data for the week ending September 21 showed:
- Lampung received approximately 32.6 millimeters of rainfall, about 13% below long-term averages.
- Bengkulu recorded roughly 41.5 millimeters, about 6% below normal.
- South Sumatra received about 31 millimeters, nearly 5% below average levels.
Although these deficits are not extreme individually, they are occurring during the early stages of development for the next crop cycle and against the backdrop of a strengthening El Niño event.
Recent assessments of Indonesia's coffee-growing regions have highlighted concerns regarding flowering initiation, uneven bloom development, and the risk that insufficient rainfall distribution could negatively affect the emerging 2027/28 crop.
This timing is important because Indonesia is transitioning between crop cycles. Much of the current robusta harvest is already underway or moving through export channels, meaning weather risks are increasingly shifting toward formation of the next crop. Industry weather analysts report that flowering initiation is beginning across portions of Sumatra, making rainfall distribution over the coming weeks particularly important.
Coffee trees require carefully timed rainfall to stimulate flowering and support uniform bloom development. Too much rain can damage flowering, as occurred during the current crop cycle. Too little moisture can also create problems by reducing flowering intensity and causing uneven fruit development. This creates an unusual situation in which Indonesia may be moving directly from a weather-driven "too wet" problem into a potential "too dry" problem.
The short-term forecast offers little indication that widespread soaking rains are on the way. According to BMKG, rainfall through late September and into early October is expected to remain generally light to moderate across much of Indonesia as strong El Niño conditions continue limiting available atmospheric moisture. National rainfall totals are forecast to remain largely within low-to-medium categories.
Weather forecasts for Sumatra indicate periodic showers during the next week but generally light accumulations, with daily precipitation probabilities mostly ranging between 25% and 45%. No widespread flooding events or major rainfall episodes currently appear in forecast guidance.
While the drier outlook may benefit harvest operations and post-harvest drying, it also means traders will increasingly focus on whether sufficient moisture arrives to support flowering and early crop development.
The timing is notable because coffee futures markets have become increasingly bearish. Recent price declines have been fueled by expectations of improved global supplies, large Brazilian production, strong export flows, and forecasts from the International Coffee Organization suggesting a return to global surplus.
Yet Indonesia's weather story illustrates how fragile those surplus expectations may be. The current crop has already been reduced by excessive rainfall and flooding. Now, just as producers begin focusing on the next crop cycle, one of the world's largest robusta suppliers is confronting below-normal rainfall and a strengthening El Niño pattern.
Whether current dryness develops into a meaningful production threat remains uncertain. However, Indonesia's experience serves as a reminder that the coffee market's weather risks have not disappeared. They may simply be evolving.
Alexis Rubinstein
- Coffee
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