Brazil Coffee Output Rise Pushes Arabica Futures Down

Coffee traders were hit with a sharp price drop Wednesday after key industry data suggested Brazil—by far the world’s largest coffee producer—is set to harvest significantly more beans next year. That news quickly sent global arabica prices tumbling, with futures hitting their lowest point since July.

Volcafe, the coffee division of Swiss-based ED&F Man, now forecasts Brazil will produce 49.5 million 60kg bags of coffee in the coming season—up from this year and driven by strong November rainfall across growing regions.

Why Did Arabica Coffee Futures Drop So Sharply?

On December 17, Intercontinental Exchange (ICE) arabica coffee futures for March delivery fell 5.85 cents, or 3.3%, to $1.7185 per pound—the lowest since July 23, when prices bottomed at $1.7115. That’s a drop of over 3% in a single day, driven entirely by revised expectations around global supply.

The big shift came from a report by Volcafe, which predicted that improved rainfall in Brazil during November will lead to a larger 2024 harvest. Their updated estimate puts next year’s Brazilian production at 49.5 million 60kg bags—more than this year, and enough to shift global market balance.

What Else Moved in the Global Coffee & Commodity Markets?

While arabica futures plunged, other commodities showed mixed movement. March robusta coffee futures (LRCc2) closed down 18 dollars, or 0.9%, at $1,946 per tonne.

In sugar, March ICE raw sugar (SBc1) initially fell to a two-and-a-half-month low of 14.62 cents per pound, but rebounded to close up 0.01 cent, or 0.07%, at 14.72 cents. Traders noted that while oil prices helped support a bounce, selling by producers capped gains. March white sugar (LSUc1) also rose, closing at $384.70 per tonne, up 1 dollar or 0.3%.

In the cocoa market, both London and New York futures posted gains for the fourth consecutive day. March London cocoa (LCCH5) settled 11 pounds higher at £1,939 per tonne (0.6%), while March New York cocoa (CCH5) added 1 dollar to $2,915 per tonne (0.03%).

What Does This Mean for Coffee Prices Going Forward?

The steep decline in arabica futures reflects trader concerns over a well-supplied market. Brazil’s ability to ramp up production—thanks to favorable weather and highly mechanized, high-yield farming methods—adds downward pressure on global prices. With 49.5 million bags projected for 2024, the world’s coffee supply is expected to remain robust, limiting upward price movement in the near term.

Frequently Asked Questions

What caused the drop in arabica coffee futures on December 17?

Arabica coffee futures fell over 3% after Volcafe forecast that Brazil will produce 49.5 million 60kg bags in 2024, up from the current year, due to favorable November rains. This increased supply outlook drove March ICE arabica futures down to $1.7185 per pound, the lowest since July.

How much did March arabica coffee futures drop?

March arabica coffee futures (KCc2) fell 5.85 cents, or 3.3%, to $1.7185 per pound on December 17, hitting a seven-month low of $1.7115 earlier in the session.

What is Volcafe’s 2024 Brazil coffee production estimate?

Volcafe forecasts Brazil will produce 49.5 million 60kg bags of coffee in 2024, an increase from the current year, citing ample November rainfall as a key factor behind the higher yield prediction.

How did other coffee and commodity futures perform?

March robusta coffee futures fell 0.9% to $1,946 per tonne. Raw sugar futures initially dropped but closed slightly up at 14.72 cents per pound, while white sugar rose 0.3%. Both London and New York cocoa futures gained for the fourth day in a row.

Why does Brazil’s coffee production impact global prices?

Brazil is the world’s largest coffee producer, and its output heavily influences global supply levels. Higher production from Brazil typically leads to greater overall supply, which can reduce scarcity and put downward pressure on international coffee prices, especially for arabica.

Recommended FrontStreet Brazilian Single Origins

For a true taste of Brazil’s classic profile, try the FrontStreet Brazil Queen Manor—grown at high altitude in the rare Moji Guaçu region from unique Yellow Bourbon beans. Medium to dark roasted, it offers creamy, nutty, and roasted bread notes with a clean, low-acid cup and long-lasting finish. Also consider blends like the FrontStreet Black Cocoa Blend, which features a high proportion of Brazilian beans for smooth, sweet body with ripe fruit undertones. These beans showcase Brazil’s signature balance, making them ideal for espresso, drip, or French press. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.