Arabica coffee: a pillar of global and national production

Arabica coffee has established itself as an essential pillar in the global agricultural economy, recognized for its smooth taste and complex aroma. In Brazil, this variety plays an even more significant role, as it accounts for the majority of national production and thus drives the country's economy. 

The current scenario is marked by complexities that demand constant attention from producers and investors. Price fluctuations, weather conditions and international trade policies create an environment of constant change. To navigate it successfully, it is essential to understand the nuances of production and the market forces that shape the value of the commodity.  

In this article, we'll cover:

• The relevance of Arabica coffee on the international and national stage;
• Stages of its cultivation and processing;
• Distinctive characteristics and quality factors;
• Factors affecting supply and demand;
• The importance of risk management.

Happy reading!

How important is arabica coffee in the global market? 

Arabica coffee plays a central role in the global coffee industry, dominating production (60% to 70%) and consumption. Recognized for its superior quality, it is considered the standard of excellence in the coffee industry.   

Brazil is the world's largest producer of this variety. The commodity is widely grown in medium- and high-altitude regions such as Sul de Minas, Cerrado Mineiro, Mogiana (SP) and Chapada Diamantina (BA).  

In more demanding markets, such as Europe and the United States, demand for Arabica continues to drive much of the international coffee trade. According to Laleska Moda, an analyst at Hedgepoint, "Brazilian beans accounted for around 30% of all US coffee imports". However, in August 2025, Brazilian exports to the US fell by 46.4% compared to the same month in 2024, a direct reflection of the 50% tariff imposed by the US government. 

Therefore, any change in Brazilian production or trade policies reverberates throughout the global market and affects everything from prices to the availability of the final product on consumers' shelves around the world. 

What are the stages of growing and processing Arabica coffee? 

Growing and processing Arabica coffee requires technical care at every stage, from planting to obtaining the processed bean. The cycle begins in the field, where appropriate management practices, such as balanced nutrition, irrigation, plant health control, as well as a suitable climate, guarantee productive and quality crops.  

Harvest care is also important, as it significantly influences the final quality of the grains. In addition, grain ripening (the previous stage) can sometimes occur unevenly and is greatly influenced by the weather.  

For this reason, selective harvesting can often be a good option, whether manual or mechanized, as it prioritizes ripe cherries to preserve the coffee's sensory potential. 

In post-harvest, there are a few different processing methods that can influence the type and quality of the final bean obtained:  

• Dry (natural): cherries are dried in the sun or in dryers and then hulled. This results in fuller-bodied, sweeter coffees; 
• Wet (washed): the husk/pulp and some or all of the mucilage are removed, followed by fermentation and washing. Produces beverages with greater acidity and smoothness. 
• Semi-humid (honey process): retains part of the mucilage in the bean and balances body and sweetness.  
  
  

Finally, the coffee goes through drying and processing, stages that standardize the product and reduce defects. The aim is to ensure the quality and competitiveness of Arabica on the global market. 

How do the characteristics of Arabica coffee define its quality? 

The intrinsic characteristics of Arabica coffee give it a reputation as a higher quality drink, with a flavor profile that ranges from floral and fruity notes to chocolate, caramel and nuts, depending on the origin and processing. Its bright acidity, medium body and complex aroma are highly valued by consumers and experts alike. 

Thus, the quality of Arabica is an important competitive differentiator. However, Laleska Moda points to recent challenges in Brazil's 25/26 harvest: "there were reports of quality problems between June and July, mainly in relation to the quantity of mocha beans and beverage quality." This underlines how agronomic and climatic factors can directly impact the final characteristics of the grain and, consequently, its market value. 

What factors influence the supply and demand of arabica coffee? 

Arabica coffee supply and demand are shaped by a complex interaction of economic, climatic and political variables, which determine the prices and availability of the product on the global market. Understanding these elements is key to predicting trends and mitigating the risks associated with trading this commodity. 

Impact of tariffs and international trade 

Trade policies have a substantial influence on the flow and costs of arabica coffee. The 50% tariff imposed by the US on Brazilian coffee directly affected demand, raising prices for American consumers. In August, shipments to the US totaled only 301,000 bags, a drop of 46.4% compared to 2024. 

In addition, US buyers have been asking for shipments to be postponed to avoid the tariff, which supports future arabica prices and creates uncertainty in the global supply chain. 

Weather conditions and harvest 

Climatic conditions are determining arabica coffee production. The 25/26 harvest is in its final phase, with an estimated drop in production of 13.3% compared to the previous crop, totaling 37.7 million bags. Regions such as Sul de Minas and Zona da Mata faced below-average rainfall and quality problems. 

Weak frosts were recorded in parts of southern Minas Gerais and the Cerrado Mineiro, and there is concern about a possible La Niña event between October and December, which could impact the 26/27 harvest. 

Stocks and trading 

ICE-certified stocks continue to fall and are below the 5-year average and 2024 levels. The share of Brazilian grains in these stocks is low, which represents a challenge for recovering the available volume.  

Marketing of the 25/26 harvest is at 46%, below the five-year average (55%). For arabica, the figure is 43% against an average of 53%. Many producers are waiting for the 26/27 crop to bloom, which restricts supply on the physical market and keeps Brazilian differentials under pressure. 

How does risk management prepare your company for the future? 

Risk management is important for arabica coffee market participants. After all, it allows them to protect themselves against price instability and exchange rate variations. 

The complexity of the market, with factors such as trade policies and weather conditions, requires the adoption of hedging products. It is also essential to monitor the development of the 26/27 Brazilian crop and the willingness of coffee growers to sell, factors that strongly influence prices in the medium term.  

At Hedgepoint Global Markets, we understand the challenges of the arabica coffee market and work to ensure that your company can safely navigate price and currency fluctuations. To this end, we have the Hedgepoint HUB, a platform where we offer courses on hedging instruments and in-depth analysis of the coffee market and other commodities.  

Do you want access to valuable information and customized solutions that can strengthen your business's risk management? Sign up for the Hedgepoint HUB! 

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