Brazil’s coffee stockpiles are dwindling as farmers sell off crops due to record high prices, with 88% of the 2024 crop sold by most growers. This situation is caused by a severe drought impacting production, with projections indicating a 4.4% decline in the next year’s crop. Concerns of a supply shortage loom until the next harvest.
Brazil’s coffee stockpiles are rapidly depleting as farmers capitalize on record high prices for coffee beans. Following severe drought conditions in 2024, producers have sold a significant percentage of their coffee months earlier than expected. The price of arabica coffee has risen dramatically, with increases of 70% over the past year, while robusta prices surged by 72%. As of early February, arabica reached USD 4.30 per pound, and robusta peaked at USD 5,847 per metric ton.
According to reports from consultancy Safras & Mercado, farmers have already sold 88% of their 2024 crop, surpassing last year’s figures and the five-year average. Willian Cesar Freiria from Cocapec noted, “We never had such low stocks in February, a period that is still distant from the new crop.” He emphasized that the situation is prevalent across the coffee sector, indicating limited supply until the harvest later this year.
Luiz Fernando dos Reis, from Cooxupe, confirmed that their farmers have sold 90% of the current crop, stating, “What they have left is the lowest amount we ever saw in our records.” With the next harvest projected to start in May or June, a supply shortage looms, as the new coffee will not be ready for shipping before July.
While many farmers have sold most of their crop, some, like Paulo Armelin from the Cerrado Mineiro region, are retaining portions for security. Armelin is negotiating sales at USD 4.50 per pound, which reflects a significant increase from last year’s prices. He expressed concern over his reduced production, hence his decision to keep reserve coffee from the previous harvest. The trading of coffee futures has also dipped this year, currently at 13%, compared to a four-year average of 22%.
Looking ahead, Brazil’s government crop forecasting agency, Conab, anticipates a 4.4% drop in production for the 2025 to 2026 crop season. A forecasted total of 51.81 million bags would mark a three-year low, exacerbated by ongoing drought conditions affecting rainfall across the country.
In summary, Brazil is facing a significant depletion of its coffee stockpiles as farmers sell off their crops in response to record-high market prices. The combination of adverse weather and strong sales has resulted in low inventories ahead of the next harvest season. Future production projections are grim, with expectations of reduced outputs due to ongoing drought, further impacting coffee availability and prices.
Original Source: macaonews.org
