Brazil's newly produced seasonal coffee sells only 12%! Continue to push up prices

Recently, Safras, a local consultancy in Brazil, released a recent report on coffee sales in Brazil, which pointed out that as of December 11, Brazil had sold 79% of the coffee produced in 2024max 25, far higher than the 69% in the same period last year and the average 73% in the past five years, and only 12% of the coffee production in 2025max 26 was pre-sold.

Safras said that as coffee prices have remained high recently, prompting farmers to sell coffee beans, some of the sold coffee has been stored in warehouses, waiting for delivery. At present, 77% of Arabica coffee and 84% of Robusta coffee have been sold, both of which are higher than the progress of sales in the same period in the past.

However, as coffee in Vietnam enters the harvest season, the futures price of Robusta coffee has fallen, which has also led Brazil to slow the progress of Robusta coffee sales. Due to the strong export of Brazilian coffee beans in November, most growers now have plenty of money and are in no hurry to sell the remaining coffee crops.

In addition, the report points out that so far, Brazil has pre-sold only 12% of its coffee production in 2025, which is much lower than the sales figures for the same period last year. This is because Brazil suffered its worst drought in 70 years between July and September, threatened by forest fires, followed by irregular rains, raising fears that coffee crops could fail in the next season, Safras said.

At present, growers are worried that there will not be enough coffee beans to be delivered, so they are very cautious about pre-selling coffee. Due to the reduction in sales and concerns about the future supply of coffee, the spot price of coffee in Brazil has recently exceeded a 26-year high.

And, at present, a number of institutions have issued coffee production estimates for the next season, but the market believes that it is still "too early" to make a final conclusion. However, Brazilian domestic growers will still choose to continue to reduce the amount of pre-sale, so domestic and international coffee prices will remain high until future production data are clear.

And at present, the Brazilian coffee industry is still facing many difficulties, the first to bear the brunt is the exchange rate. Brazil's recent political situation, economic policy, global market volatility and commodity price fluctuations have led to a sharp fall in the exchange rate of the real against the dollar. Although the Brazilian government has taken action and the central bank announced an interest rate hike, this is the third time that Brazil has raised interest rates this year, but it has not stabilized the real exchange rate and has fallen by more than 20%.

This makes Brazilian exporters face severe challenges in the international market, all because exchange rate fluctuations can lead to instability in export earnings. And the devaluation of the real has led to a rise in domestic prices in Brazil, which has also increased the cost of growing coffee, aggravating the pressure on the operation. In response to exchange rate fluctuations, many exporters will use financial instruments to hedge (coffee futures), which has reduced losses, which has also pushed up futures prices.

As for the current situation, the head of commodity strategy at Denmark's Saxo Bank said that coffee is a daily drink for billions of consumers around the world, but it has grown rapidly in recent years, but the global supply of coffee has failed to keep up with the surging demand. Brazil and Vietnam, in particular, account for 56 per cent of global coffee production, but are in short supply due to climate and other problems.

In addition, the head of agricultural markets at Rabobank warned that coffee prices will rise further next year after Brazil's coffee harvest has failed for five consecutive years due to bad weather. Coffee prices fall only when supply improves and stocks are adequately replenished, but the process takes years.

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