NEW YORK, Feb 25 (Reuters) - Global coffee production is projected to reach 180 million 60-kg bags in the 2026/2027 season that starts in October, the largest annual supply on record, according to a report by Dutch bank Rabobank released on Wednesday.

* The bank said higher arabica coffee production in Brazil, in the wake of good weather, is the main reason for the global forecast.

* It said good supply, along with a constant flow of coffee into certified ICE warehouses, is causing the current bear market.

* Rabobank said fund selling "exacerbated the price drop a bit too much and that a short-term recovery may occur."

* It sees a drop in demand of 2.9% in Europe and 24 non-producing countries in the fourth quarter of 2025.

* The bank, however, said U.S. coffee volumes fell only 0.9% in 2025 despite an 11.1% retail price rise.