Brazil’s coffee stockpiles are nearly depleted as farmers sell in response to record high prices, driven by significant price surges for both arabica and robusta varieties. Most producers have sold almost all of their crops ahead of schedule due to a devastating drought. The Brazilian government’s forecasts indicate a continued decline in coffee production, raising concerns about future availability.
Brazil’s coffee stockpile, designed to be sustainable until July, is rapidly depleting as farmers are capitalizing on soaring prices. Following a devastating drought in 2024, coffee producers have sold nearly all their beans ahead of the usual timeframe. Global prices for coffee have surged, with arabica prices increasing by 70% and robusta by 72% over the past year, reflecting significant market demand.
On 11 February, arabica coffee reached a record price of over $4.30 per pound, with robusta peaking at $5,847 per metric ton the following day. Reports from consultancy firm Safras & Mercado indicate that farmers have sold 88% of the 2024 crop, which is greater than last year’s 79% and exceeds the five-year average of 82%.
Sales manager Willian Cesar Freiria from Cocapec commented on the unprecedented low stock levels for February, noting a diminished amount of coffee available until the start of the next harvest. Similarly, Luiz Fernando dos Reis from Cooxupe confirmed that their farmers have sold 90% of their production for the year, presenting an alarming low stock record ahead of the upcoming season.
To navigate looming shortages, some farmers are retaining portions of their harvest as a contingency plan. For instance, Paulo Armelin is preserving 40% of his crop. He is currently negotiating sales at $4.50 per pound, significantly higher than last year’s prices, while overall sales of coffee futures have dropped significantly this year compared to previous averages.
Additionally, the Brazilian government’s crop forecasting agency Conab anticipates a production decline of 4.4% for the 2025-2026 coffee season, marking the lowest output in three years due to ongoing dry conditions, indicative of the enduring impact of adverse weather.
In summary, Brazil’s coffee stockpiles are approaching critical lows as farmers react to unprecedented high market prices by selling out early. The persistent drought has forced producers to seek maximum profits, resulting in much greater sales than previous years. Without adequate stock to bridge the gap until new crops are harvested, the coffee market faces potential shortages. Furthermore, forecasts predict declining production levels, exacerbating concerns over future coffee availability.
Original Source: macaonews.org
