Coffee remains highly valued in the international market at the beginning of 2025. Concerns about the next Brazilian coffee crop, low physical availability, and the supply deficit continue to be factors that support prices, especially of arabica. Robusta coffee on the London exchange showed a slight decline with the harvest progress in Vietnam, but its prices also remained high.
Two factors linked to Brazil help explain the current situation of the coffee market. The first is scarce physical availability. Less than 20% of the 2024/25 Brazilian crop remains in the hands of growers, and the remaining stocks from previous crops have also decreased considerably. Less coffee available means greater resistance on the part of sellers. This stance is reinforced by the expectation of a decline in the 2025/26 arabica crop in Brazil. According to SAFRAS, arabica production is expected to be slightly above 38 mln bags, with total production estimated at just over 62 mln bags. Despite growth in the canephora crop, the total production will be lower than in 2024.
The perception of a lower coffee crop in Brazil raises concerns about supply, which contributes to supporting prices. In addition, the price of the beverage remains high on the international market, and the dollar remains quite valued against other currencies, especially the real. This reinforces the firmness of prices paid to growers and makes life more difficult for buyers. This situation directly impacts the industry’s cash flow, forcing changes in financial strategies, which should have consequences throughout this year.
This situation also affects trading companies, which face restricted credit lines and compromised financial capacity, requiring tight and sometimes risky financial management. Perhaps for this reason, the coffee market is going through a period of settlement in the price curve, after arabica rose 68% on the New York Stock Exchange and robusta 88% in London between the beginning and the end of 2024. Although the market continues to be supported by concerns about supply, it is finding it difficult to continue advancing due to the growing financial concerns of buyers. Thus, the market seeks to consolidate its level of performance in 2025, continuing with highly appreciated prices.
