Brazil’s Coffee Crisis: Prices Surge 80% as Drought Slashes Production

The Brazilian Coffee Industry Association (Abic) reports that coffee consumption in Brazil fell by 15.9% in April 2025 compared to the same month last year.

This sharp decline comes as coffee prices have soared 80% over the past 12 months, marking the steepest increase in 30 years. Retail coffee sales dropped 5.13% between January and April 2025, with total sales reaching 4.7 million 60-kg bags.

The price surge has affected all coffee categories, with soluble coffee experiencing the most dramatic increase at 85%. Gourmet varieties rose by 56%, while traditional coffees increased by 50%.

Multiple factors have created this perfect storm in the coffee market. Severe drought conditions across Brazil have devastated coffee flowering and fruit development.

The dry weather in 2024 has particularly damaged arabica production, which is forecast to decline by 13-16% for the 2025/26 harvest season. Climate change continues to wreak havoc on Brazil’s coffee regions.

In the Cerrado Mineiro area, temperatures reached nearly 40°C with water deficits exceeding 400mm in some locations. These conditions have caused irreversible damage to coffee plants, burning productive branches and triggering physiological disorders.

While arabica production suffers, robusta coffee varieties show resilience. Forecasts suggest robusta production could increase by 7-18% in the 2025/26 season, reaching record levels.

This shift has narrowed the price gap between arabica and robusta varieties for the first time since the mid-1990s. The global coffee market faces additional pressure from production declines in Vietnam and Indonesia.

Vietnam’s coffee output dropped 20% in the 2023/24 season due to prolonged dry weather. Similarly, Indonesia’s production fell 16.5% following excessive rainfall.

Brazil’s coffee stocks are projected to hit historic lows of just 640,000 bags by June 2025. This shortage will force a reduction in exports from 40.5 million bags to 38 million bags in the 2025/26 season.

Industry experts warn that high prices will likely continue through 2026 unless ideal harvest conditions return. The crisis poses significant challenges for Brazil’s $8.1 billion coffee sector, which employs 3.5 million people across the country.

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