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Heavy rain + drought Brazil chaotic weather makes coffee futures soar 77%

Published: 2026-08-04 Author: World Gafei

Last Updated: 2026/08/04, Continued drought hits Brazil's coffee industry hard. Next year, however, the weather could be even worse, when Brazilian coffee production falls for three consecutive years for the first time since 1965. Brazil's coffee bean production will fall 18 percent to 40.1 million bags after the harvest season ends next month, Bloomberg News reported Wednesday, citing forecasts from Brazil's National Coffee Council. Each bag weighs 60 kg. last year's crop

Continued drought hits Brazil's coffee industry hard. Next year, however, the weather could be even worse, when Brazilian coffee production falls for three consecutive years for the first time since 1965.

Brazil's coffee bean production will fall 18 percent to 40.1 million bags after the harvest season ends next month, Bloomberg News reported Wednesday, citing forecasts from Brazil's National Coffee Council. Each bag weighs 60 kg. Last year's output was down 3.1% year on year. The coffee harvest season is from April to September each year.

With weather conditions showing no signs of improving before the southern hemisphere spring, coffee production in 2015 could fall below 40 million bags, the longest decline in production in 50 years, the committee said.

Brazil is the world's largest supplier of coffee beans, mainly producing relatively high-priced Arabica beans. However, the weather conditions in the country this year are extreme, with heavy rain in July and drought in August, and the plant growth environment is very bad.

Citi said this month that global supply constraints could continue into 2016 due to a shortage in Brazil. Brazil supplied 36% of the world's coffee beans last year.

International coffee futures have performed well in commodity assets so far this year. Arabica coffee futures have risen 77 percent to $1.9545 on the ICE. Coffee futures could rise as much as 15 percent, or $2.25 a pound, by the end of the year, according to a Bloomberg News survey of 18 analysts.

Donald Selkin, chief market strategist at U.S. brokerage National Securities Corp., told Bloomberg News: "Given all the problems in Brazil, the market is very vulnerable to upside. People expect supply to tighten and wait for more dramatic weather changes."

Soaring coffee futures prices will drive up spot prices for unroasted coffee beans, and retailers will likely be forced to raise prices. As a result, companies such as Starbucks, which need to buy a lot of coffee beans, may also raise the price of the final product. Coffee retailer Keurig Green Mountain Inc., Chief Financial Officer Frances Rathke said earlier this month that they had raised retail coffee prices this month. Starbucks and J.M. Smucker had already raised prices.

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