The global coffee market is heading into a pivotal “transition year” in 2026, marked by expectations of record supply that could reshape global price dynamics and trade flows.
According to industry projections for the 2026/27 season, global coffee production is expected to reach about 182.5 million bags, the highest level on record.
The surge is largely driven by a strong recovery in Brazil, where favourable weather conditions are expected to deliver more than 75 million bags of output.
The increased supply is projected to create a global surplus of around 10 million bags, a development that typically signals downward pressure on international coffee prices.
However, analysts say immediate price relief for consumers and roasters remains constrained by persistent logistical challenges in global trade routes.
Disruptions and rerouting of shipments have increased freight and insurance costs, keeping market volatility high despite the surplus outlook.
Arabica futures have remained sensitive, trading in a relatively tight range of 280 to 300 US cents per pound, as supply expectations are offset by continued transport inefficiencies.
At the same time, regulatory uncertainty has eased slightly after the European Union postponed the implementation of its Deforestation-Free Products Regulation (EUDR).
Large operators now have until December 30, 2026, to fully comply with the new traceability requirements.
The delay is seen as particularly significant for producing countries like Uganda, where smallholder farmers dominate the sector and full traceability systems are still being rolled out.
Despite global uncertainty, Uganda’s coffee sector has recorded a historic performance, cementing its position as one of Africa’s leading exporters.
Over the past 12 months, the country exported 8.8 million bags of coffee, generating approximately $ 2.5 billion (about Shs9 trillion) in export earnings—a record high for the sector.
Robusta coffee continues to dominate Uganda’s export mix, but the country’s Arabica varieties are increasingly attracting premium prices on the international market, contributing to improved earnings.
The strong performance comes at a time when global markets are preparing for increased supply competition, particularly from major producers like Brazil.
Risks Ahead
Despite the record earnings, sector analysts caution that Uganda still faces two major risks that could affect long-term competitiveness.
The first is traceability compliance. With the EUDR deadline now extended to late 2026, Uganda has additional time to strengthen farmer registration systems.
However, current estimates indicate that only about 10 percent of the country’s approximately 1.8 million coffee farming households are fully mapped.
The second risk is climate variability. While production has remained relatively strong, parts of western Uganda have recently experienced dry spells affecting Arabica-growing regions, although early indicators for the next flowering season remain cautiously positive.
As the global market shifts into a surplus-driven cycle, Uganda’s challenge will be to maintain quality premiums, strengthen traceability systems, and safeguard production against increasingly unpredictable weather patterns.
