Rabobank warning on arabica future: climate risk and the long-term cultivation outlook for roasters

Rabobank warning on arabica future: climate risk and the long-term cultivation outlook for roasters

Rabobank, the Dutch agricultural lender, warned in a report published on 30 March 2026 that climate change could make 20% of current arabica growing areas unsuitable for cultivation by 2050, up from 8% today. The assessment, which classifies growing areas into four suitability categories, projects steep losses in Brazil, Colombia and Honduras while pointing to gains in Ethiopia. For roasters and importers, the report shifts the planning horizon from near-term price swings to a structural re-rating of where arabica can be grown.

The warning landed as coffee futures were falling. On Monday 30 March 2026, the New York May contract fell 3%, breaking through the $3 support level to close at 292.55 cents, the lowest in nearly eight months, while the London May contract fell 4.8% to settle at $3,419, according to Comunicaffe. A record Brazilian harvest, a projected global supply surplus and a stronger dollar were pushing prices down. Yet the Rabobank analysis, published the same week, argues the longer-term supply picture is tightening, not loosening.

Rabobank's report, authored by its RaboResearch climate and beverages analysts, classifies arabica growing areas into four categories ranging from highly suitable to unsuitable, based on current and forecast climate conditions. It finds that 8% of current growing areas are already unsuitable, where crops require more investment and produce lower yields, and projects that share could rise to 20% by 2050. Reuters reported the same figures, noting that suitable areas in Brazil average 32.6 sixty-kilogram bags per hectare against roughly 28 bags in unsuitable areas.

The country-level shifts are uneven. In Brazil, the world's top arabica producer, 81% of the current harvest takes place in suitable areas, a share Rabobank projects could drop to 62% by mid-century, with a significant decline in output in absolute terms. Colombia could see its suitable-area share fall from 56% to 45%. Honduras faces the steepest drop, from 53% to just 12%. By contrast, Ethiopia could see its share of arabica grown on suitable land rise from 39% to 50%, with highly suitable zones expanding.

What this means for buyers

For procurement teams, the report is a reminder that arabica supply risk is becoming a structural feature, not a cyclical one. Near-term futures weakness driven by a large Brazilian crop does not cancel the longer-term contraction in suitable growing area. Buyers who treat today's bearish market as a reason to delay diversification may be locking in exposure to origins whose productive capacity is projected to shrink.

East Africa, and Ethiopia in particular, stands out in the Rabobank model as a relative beneficiary. That supports the case for building Uganda and regional East African arabica into sourcing programs as a hedge against concentration risk in the Americas. Uganda's arabica, grown at altitude, sits in a geography the report suggests could become comparatively more favorable, which matters for roasters seeking origin stability over multi-year contracts.

The report also points to adaptation costs. As suitable area shrinks, producers are expected to lean on irrigation, agroforestry, improved varieties and better agronomic practices, all of which raise the cost of production. That cost pressure is likely to show up in premiums and in the price floor for quality arabica, even in a market currently trading lower. Contract timing, quality specifications and origin diversification should be reviewed with this longer horizon in mind, rather than against the current futures curve alone.

FAQ

How much arabica growing area could become unsuitable by 2050? Rabobank projects that 20% of current arabica growing areas could be classified as unsuitable by 2050, up from 8% today, based on its report published on 30 March 2026.

Which origins face the largest suitability losses? Honduras is projected to see its suitable-area share fall from 53% to 12%, Colombia from 56% to 45%, and Brazil from 81% to 62% by mid-century, according to the Rabobank report.

Does the report see any arabica origins gaining? Yes. Ethiopia is forecast to see its share of arabica grown on suitable land rise from 39% to 50%, with highly suitable zones expanding, per the Rabobank analysis.

Sources: Comunicaffe | Rabobank | Reuters