Highlights

  • ICE March arabica closed at 264.65 cents per pound on Wednesday, down 1.25 cents, with December ending at 269.00.
  • Brazilian coffee awaiting grading reached 104,370 bags, the most in eight months, while certified arabica stocks topped 241,000 bags.
  • Brazil shipped 287,000 tonnes of coffee in October, up 23% year on year, as the real hit a 15-month low.
  • Smucker plans to cut coffee prices in fiscal 2027 and expects net sales to fall 3% to 4%.

Arabica coffee is sliding as Brazilian Supply builds. The ICE March 2027 contract closed at 264.65 US cents a pound on Wednesday 11 November, down 1.25 cents, while the expiring December contract ended at 269.00, down 2.40. Earlier in the session arabica touched a six-week low of $2.6215 per pound, and December has lost roughly 11 cents in a week. Certified stocks are rising from near 27-year lows, exports are up and rain has improved next year's crop outlook. Starbucks (NASDAQ:SBUX) and J.M. Smucker (NYSE:SJM) buy the same beans but feel cheaper prices very differently.

Brazil's Supply Signals

The clearest evidence of rising supply is at ICE warehouses. Some 104,370 bags of Brazilian coffee were waiting for grading, the most in eight months, and certified arabica stocks rose above 241,000 bags, their highest since mid-October.

Stocks remain low by historical standards. Certified stocks were 225,068 bags on 29 October, near 27-year lows, and exchange stocks of 220,917 bags on 4 November compared with 431,481 a year earlier. The recent rise is a change of direction, not a return to comfortable levels.

Exports point the same way. Brazil shipped 287,000 tonnes in October, up 23%, and the real hit a 15-month low against the dollar, which raises local-currency returns and can encourage farmers to sell.

Weather and Tariffs

Rain in September and October has improved the outlook for Brazil's 2027/28 crop, with favourable rain and mild temperatures easing fears of a worst-case El Niño drought. El Niño remains the main upside risk, with weather disruption possible into early 2027, and drought and heat have harmed the Central American crop, though Brazil dominates prices.

Tariffs drove much of the 2025 rally, when US duties on Brazilian coffee restricted exports and pushed futures to records. On 23 July 2026, the US Trade Representative left Brazilian coffee in all forms off a new 12.5% Tariff from Section 301 investigations. Brazil ships around 6 million 60kg bags a year to the US, and no new change has been found. The main effect now is on cash flows, as some US roasters report or pursue refunds of tariffs paid earlier.

Company Exposure

Starbucks buys high-quality arabica, so green coffee is a direct cost. On 29 October it reported fiscal fourth-quarter global comparable sales up 7.2% and Revenue down 4% to $9.14 billion, mainly because of China deconsolidation. Coffee is a small part of the price of a café drink and Starbucks buys forward, so lower futures would reach its margins slowly and in part.

J.M. Smucker, owner of Folgers, Dunkin' at retail and Café Bustelo, is more directly exposed. In June it said lower green coffee costs would let it cut coffee prices in fiscal 2027, and it expected net sales to fall 3% to 4% as savings were passed on. For a packaged roaster, cheaper beans tend to lower revenue, while margins depend on how quickly retail prices are reset.

Westrock Coffee roasts and supplies coffee to brands and retailers, largely passing through bean costs. Its net sales fell 15.4% to $300.2 million, partly because lower green coffee prices and $26.1 million of tariff refunds were passed to customers, and it reaffirmed its 2026 adjusted EBITDA outlook of $90 million to $100 million.

What Could Change the Outlook

Prices could find support if El Niño brings drought to Brazil, grading backlogs clear slowly, certified stocks stop rising or a stronger real reduces farmer selling. They could weaken further if Brazil's 2027/28 crop keeps improving, exports stay strong or more coffee is certified on ICE. These scenarios are conditional, not predictions.

Watch daily certified stocks and grading queues, December's first notice day on 19 November and the roll into March, monthly Brazilian export data, Friday's CFTC positioning and El Niño updates.