Brazil’s Processed Coffee Bucks the Green Bean Slump

Brazil’s instant coffee industry posted its strongest February in five years, even as U.S. tariffs continued to weigh on total shipments. The country exported 7,409 tonnes of soluble coffee last month — a 13.9% increase over February 2025 — generating $90.3 million in revenue, according to the Brazilian Instant Coffee Industry Association. The Rio Times, the Latin American financial news outlet, reports that Brazil coffee exports in the processed segment are defying the broader downturn hitting green bean shipments.

The result is particularly striking because green coffee exports plunged nearly 27% in February as farmers withheld beans in anticipation of a record 2026/27 harvest. Instant coffee, a higher-value processed product, is moving in the opposite direction.

Brazil Coffee Exports Defy U.S. Tariff Pressure

The February rebound came despite the impact of U.S. tariffs that hit Brazilian instant coffee with a 50% surcharge through most of early 2026. First-quarter volumes still reflect that damage: Brazil shipped 13,235 tonnes in January and February combined, down 11.5% year-on-year, with revenue falling to $161 million.

What surprised the industry was that American buyers themselves increased purchases in February. ABICS executive director Aguinaldo Lima said the fact that U.S. importers expanded orders even under the surcharge demonstrates how dependent the American market remains on Brazilian product.

Washington reduced the tariff from 50% to 10% in March, a change Lima called a positive signal for coming months. The United States remained Brazil’s top instant coffee buyer in the first two months of 2026, importing 1,769 tonnes despite the surcharge.

Europe Offers the Next Opening

Beyond the U.S., the industry is looking at Europe as its next growth frontier. Brazilian instant coffee currently faces a 9% tariff entering the EU. The Mercosur-EU trade deal that entered provisional application on March 11 is expected to reduce that barrier gradually.

Lima said Europe is the sector’s second-largest destination as a bloc and that the tariff reduction opens real opportunities for Brazil to expand shipments. Russia was the second-largest individual buyer in early 2026 at 1,161 tonnes, up 18.5% year-on-year, while Argentina ranked third with 1,090 tonnes.

Domestic Consumption Surges

Brazil’s internal market is providing a cushion. Domestic consumption of instant coffee rose 15.1% in the first two months of 2026, absorbing 4,146 tonnes. The growth extends a decade-long trend driven by new products, improved quality, and lower price inflation compared to roasted coffee.

The domestic expansion matters strategically. In 2025, total Brazilian coffee exports fell 20.8% by volume even as revenue hit a record $15.6 billion. Instant coffee’s ability to grow both at home and abroad while green bean shipments contract shows the value of moving up the processing chain.

Outlook Hinges on Trade Policy

The instant coffee sector invested R$2.5 billion ($480 million) over the past six years in new plants and sustainability upgrades. That capacity is now meeting a moment when trade policy — not supply — is the binding constraint. A pending tax reform that would eliminate certain export credits from January 2027 adds urgency to the industry’s push for market diversification.

If the reduced U.S. tariff holds and the EU agreement delivers on its promise of lower barriers, Brazil’s instant coffee industry could reclaim lost ground in both markets simultaneously. The February numbers suggest the demand is already there — what the sector needs is for governments to stop taxing it away.