Brazil’s coffee stockpiles are rapidly decreasing as farmers sell off nearly all of their beans to profit from historically high prices. Both arabica and robusta prices have skyrocketed, leading to the sale of high percentages of the 2024 crop. Forecasts predict reduced production for the upcoming coffee crop due to ongoing drought conditions in Brazil.
Brazil’s coffee stockpiles, intended to last until July, are diminishing as farmers capitalize on record-high prices. Following significant challenges from one of the worst droughts in 2024, coffee producers have substantially reduced their inventories, eager to take advantage of global price surges, which have nearly doubled in 14 months. Prices for arabica soared 70 percent and robusta increased by 72 percent last year.
As of early February, arabica prices reached an all-time high exceeding US$4.30 per pound, and robusta peaked at US$5,847 per metric ton. According to Safras & Mercado, farmers have sold 88 percent of the 2024 crop, surpassing last year’s figures of 79 percent and the five-year average of 82 percent. Willian Cesar Freiria, a sales manager at Cocapec, noted, “We never had such low stocks in February, a period that is still distant from the new crop. Until the start of the next harvest, we won’t have much coffee to sell.”
Similarly, Luiz Fernando dos Reis from Cooxupe stated that farmers within the cooperative have sold 90 percent of the upcoming crop, recognizing the lowest stock levels on record. With the harvest not commencing until May or June and shipping not available until July, a considerable supply gap looms. While some small-scale farmers are holding back portions of their harvest, others, like Paulo Armelin from the Cerrado Mineiro region, are retaining 40 percent as a precautionary measure against lower yields.
Paulo Armelin is negotiating sales at US$4.50 per pound, marking a nearly 48 percent increase from last year’s price of US$3.05. Furthermore, coffee futures sales are trailing behind average at just 13 percent, compared to a four-year average of 22 percent. Conab, the Brazilian government crop forecasting agency, anticipates a 4.4 percent decline for the 2025 to 2026 coffee production, forecasting a three-year low of 51.81 million bags due to persistent low rainfall and historically dry conditions.
In conclusion, Brazil’s coffee stockpiles are depleting rapidly as producers take advantage of soaring prices. Both arabica and robusta varieties have experienced significant price increases, leading farmers to sell a substantial percentage of their crops far ahead of the harvest schedule. With forecasts indicating a decline in production due to prolonged drought conditions, the coffee market may be poised for continued volatility and scarcity.
Original Source: macaonews.org
