Coffee Prices Drop: How Brazil Is Affecting Market Calculations?

While drought in Central America and low Arabica stocks have pressured the global coffee market, global coffee prices declined in September.

While the drought in Central America and low Arabica reserves have put pressure on the global coffee market, the global coffee price has decreased in September.

According to Ambassador Arjan, the reason for this is the 8.7% drop in the global price of coffee, which has been announced by international observers as an increase in supply from Brazil and the prospect of an abundant product.

The global coffee index fell in September

According to the September 2026 monthly report of the International Coffee Organization (ICO), the average composite price index of this organization reached 262.18 US cents per pound in September, which shows a drop of more than eight percent compared to the previous year, i.e. August.

The International Coffee Organization has also identified the increase in access to Brazil's harvested product and the expectation of more supply as the main factors for the price drop. In contrast, low confirmed Arabica stocks and uncertainties from El Nino continue to support prices.

How much did Brazilian exports increase?

Brazil, the world's largest coffee producer, shipped more shipments in September. According to the data of Brazil's foreign trade department published in a report on October 6, the country's green coffee exports reached 235.8 thousand tons in September, equivalent to about 3.93 million 60 kg bags.

This export volume increased by 20.4% compared to September 2025 and was the highest amount in the last 20 months. Brazil's coffee export income reached 1.29 billion dollars with an increase of 8.7%; While the average export price had decreased by 9.8%.

These figures show that the increase in export volume has been able to compensate for the average price decrease. New product arrivals have also helped ease concerns about short-term supply shortages.

Why is the price of coffee still high despite the increase in supply?

One of the important factors of the market is the low level of reserves that can be delivered to the stock exchange. In a report on September 11, 2026, Reuters wrote that certified Arabica stocks on the ICE exchange fell to their lowest level in 26 years, helping to keep prices high.

According to that report, the confirmed reserves of Arabica had reached about 220,000 bags; A level much lower than the range of one to five million bags that was considered as the normal level of reserves in the past years.

Big traders at that time were trying to prepare significant shipments of Brazilian coffee for delivery to stock exchanges. The aim was to increase deliverable reserves to relieve some of the pressure from supply constraints.

However, delivery of coffee to exchange warehouses does not automatically increase certified stocks; The shipments must meet the quality standards and conditions of acceptance of the exchange.

Central American drought; A new threat to Arabica supply

On the other side of the market, weather conditions in Central America have created fresh concerns, according to Reuters. The price of Arabica coffee in this region has reached the highest level in the last three years.

Premium is an amount that is paid in addition to the reference price of futures contracts and can reflect the difference in quality, supply and demand conditions, and limited access to the product.

According to this report, Central America provides about 15% of the global supply of Arabica. Initial forecasts for the 2026/27 production season indicated a 7% drop in Honduras production and a 10% drop in Guatemalan production; Two countries that have a total of about two-thirds of Central American coffee production.

Drought associated with El Nino has intensified in the so-called "dry corridor". Experts have warned that continued adverse conditions could affect production estimates.