Mar 21
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Laleska Moda
With tighter supply in Brazil, exports fall
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- Brazilian coffee exports totaled 3.27 M bags in February, down 10.4% year-on-year. While Arabica shipments fell by 2% over the year, Conilon shipments declined 60.1% during the month.
- Cumulatively (Apr/24 - Feb/25), both varieties remain at record levels and are expected to end 24/25 on a high note. However, lower shipments are expected in the coming months due to lower availability of coffee in the country.
- While some of the stocks from previous harvests have been used in this cycle, the sales of the current crop (24/25) are higher than in recent years, pointing to a tight supply scenario in Brazil.
- A greater volume of Brazilian coffee is not expected to enter the market until the harvest in the country gains pace, after mid-June. For other origins, particularly Robusta, supply is also more limited, which should support prices, even amid fears of a fall in demand.
With tighter supply in Brazil, exports fall in February
Brazilian coffee exports fell in February, with total shipments of 3.27 M bags, 10.4% lower than the same period last year. This was mainly due to a fall in Robusta shipments, which totaled 226.1 K bags, compared with 566.6 K bags a year earlier (-60.1%). Arabica exports totaled 2.77 M bags in February, a slight decline of 2% year-on-year. In terms of revenue, exports continued to perform well, up 55.5% on February/24 and a record for the month, reflecting higher coffee prices.
Looking at the cumulative figures for the 24/25 crop (Apr/24 - Feb/25), shipments continue to show positive results. Arabica has already reached 33.84 M bags, up 13.7% over the same period in 23/24 and a record volume. For Conilon, despite the decline in shipments in recent months, the accumulated crop remains at record levels, up 46.5% on 23/24 to 8.03 M bags.
Exports in 24/25 are expected to set a new record for both Arabica and Conilon. On the other hand, the next few months could face lower shipments due to the reduced availability of coffee in Brazil.
Brazil: Exports of Arabica (M bags)
Source: Cecafé
Brazil: Exports of Conilon (‘000 bags)
Source: Cecafé
While the 24/25 season was smaller than initially expected, the strong pace of exports has led to a reduction in domestic coffee stocks and above-average sales for the current season. By February this year, approximately 91% of the 24/25 Arabica crop had been commercialized, compared to 97% for Conilon. As a result, Brazilian sales and exports are expected to remain limited in the coming months, at least until the harvest of the 25/26 crop intensifies.
Field work for the 25/26 crop is expected to begin in April in some regions (notably Conilon), but should not intensify until the end of May, as usual, with a significant volume of new coffee entering the market after mid-June. As a result, the market will rely on other origins to meet demand in the coming months, particularly for Robusta.
Brazil: Farmer Selling – Arabica (% of total)
Source: Safras & Mercado
Brazil: Farmer Selling – Conilon/Robusta (% of total)
Source: Safras & Mercado
On the other hand, in Indonesia, although supply has increased in the 24/25 crop, the country's current export levels suggest that supply may continue to tighten as producers in this region also prepare for the 25/26 harvest. In addition, Vietnam, the world's largest producer of Robusta, may also see a reduction in bean availability due to the smaller 24/25 crop, lower stocks and the reluctance of (now capitalized) producers to sell large quantities of coffee (see our Asia report).
In this sense, while in 2024 Brazil supplied much of the demand for Robusta in the first half of the year, with reduced volumes in Vietnam, this year Brazilian availability is lower, which could support prices, at least until a larger volume of the 25/26 crop from Brazil and Indonesia enters the market. On the Arabica side, while supply of the washed type tends to increase in the first half of the year - given the Colombian and Central American counties harvest - lower availability in Brazil also tends to support prices in the short term, both in the futures market (especially the May/25 contracts for these varieties) and at local prices.
In this sense, while in 2024 Brazil supplied much of the demand for Robusta in the first half of the year, with reduced volumes in Vietnam, this year Brazilian availability is lower, which could support prices, at least until a larger volume of the 25/26 crop from Brazil and Indonesia enters the market. On the Arabica side, while supply of the washed type tends to increase in the first half of the year - given the Colombian and Central American counties harvest - lower availability in Brazil also tends to support prices in the short term, both in the futures market (especially the May/25 contracts for these varieties) and at local prices.
In Brazil, for example, the basis for both type 6 good cup Arabica and Conilon 7/8 rose again after the drop in February, reflecting the strengthening of domestic prices in the face of lower Brazilian availability. The basis is expected to strengthen at least until the start of the new crop, particularly on the Conilon side, where availability is lower.
Brazil: Basis Arabica Good Cup type 6 (c/lb)
Source: Safras & Mercado, Hedgepoint
Brazil: Basis Conilon 7/8 (USD/mt)
Source: Safras & Mercado, Hedgepoint
In Summary
Despite heading towards a new record, Brazilian coffee exports have weakened in 2025. The decline is more pronounced for Conilon, and shipments are expected to continue to fall in the coming months, both for this variety and for Arabica, due to lower availability in Brazil. Not only have stocks from previous seasons been used to supply exports in recent months, but the 24/25 crop itself has been intensively sold, with less than 10% still available.
The scenario for the coming months, therefore, remains one of tight supply, at least until the new 25/26 crop arrives. It's worth noting that not only Brazil is likely to contribute to the tight situation, but availability in Vietnam is likely to decrease, while in Indonesia producers may remain more restrained as they prepare to harvest the 25/26 crop. As a result, coffee prices could be supported in the short term despite concerns over demand.
Weekly Report — Coffee
Written by Laleska Moda
laleska.moda@hedgepointglobal.com
Reviewed by Lívea Coda
livea.coda@hedgepointglobal.com
livea.coda@hedgepointglobal.com
www.hedgepointglobal.com
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