Coffee drinkers have been waiting for relief. Brazil, the world’s biggest producer, is bringing in a record harvest, and global supply is expected to outstrip demand this season. Yet the price of a bag of beans or a café latte has barely moved, and on Friday, October 16, arabica coffee futures in New York rose to nearly $3.10 a pound, their highest level since early September.
That is well below the record of more than $4.40 a pound reached in early 2025, and roughly 20% lower than a year ago. But it is still far above the levels most shoppers were used to before the price spike of the last two years.
A record crop
On paper, the supply picture has rarely looked better:
- Brazil’s 2026 crop is estimated at a record 67.6 million 60kg bags, almost 20% more than last year.
- The US Department of Agriculture forecasts world production of 189.7 million bags in 2026/27, up 10.8 million, with Brazil alone producing 71.9 million.
- World consumption is also at a record, about 179.7 million bags, but the gap points to a surplus. Analysts at Hedgepoint Global Markets estimate it at 8.9 million bags for the current crop year, and Rabobank has forecast a surplus of 7 to 10 million bags.
So why are prices still high?
- Thin warehouse stocks. Stocks of arabica certified by the ICE exchange fell to 217,646 bags in September, a 27-year low, and were still under 240,000 bags in mid-October. Traders also worry that Brazilian beans may not reach exchange warehouses in time for the December contract.
- Weather risk. Coffee trees in Brazil flower when the rains arrive in September and October. Concerns that El Niño could delay or disrupt those rains, and hurt the 2027 crop, keep buyers nervous even as rain returns to most growing areas.
- Smaller crops elsewhere. Colombia’s production fell 15% in 2025/26, to 12.65 million bags.
- Higher shipping costs. Disruption around the Strait of Hormuz and the Red Sea has pushed up freight and insurance costs this year, even though little coffee passes through the Gulf itself.
Why the shelf price lags
Even when bean prices fall, it takes months for the change to reach supermarkets and cafés. Roasters buy coffee well in advance and spent the past two years absorbing huge cost increases. Dutch coffee group JDE Peet’s said it raised its own prices by 19.5% in 2025 after what it called “unprecedented” green-coffee inflation, and Nestlé said higher coffee and cocoa costs cut its profit margin by 1.3 percentage points. Companies are likely to want lower prices to hold before cutting what they charge.
In a café, the beans are also only a small part of the price of a drink. Wages, rent, milk, cups and energy make up most of the bill.
What to expect
Rabobank expected arabica to settle at $2.50 to $3.00 a pound by late 2026, and prices have been trading at the top of that range or slightly above it. If the Brazilian rains hold and the surplus materialises, supermarket coffee could slowly get cheaper through 2027. A poor flowering season, however, could push prices up again quickly.
How to save on coffee in the meantime
- Buy whole beans in larger bags and grind them at home; they keep their flavour longer than ground coffee.
- Compare own-label supermarket coffee with branded packs.
- Brew at home and use a reusable cup; some cafés give a small discount for bringing your own.
- Watch for promotions on capsules and beans in the run-up to the holiday season.