The coffee market was given a new outlook on November 20, 2025, with the suspension of the additional 40% tariff on Brazilian beans (except instant coffee). The measure brought relief to the sector, but the price of coffee in Brazil is limited to a more pronounced correction in the short term due to low stocks at destinations.
In addition to the geopolitical issue, factors such as the reluctance of Brazilian coffee growers to make new sales, even after the tariff relief, and climatic uncertainties have brought volatility to prices, requiring increased attention from agents in the commodities chain to the dynamics of global coffee supply and demand.
In this article, we will analyze:
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World coffee stocks are at a historically low level, which supports prices in the short term and limits the expected correction after tariff relief. According to the USDA, coffee production for the 2025/26 harvest is expected to exceed the previous year's by 3.5 million bags, reaching an all-time high of 178.8 million.
The coffee shortage is not restricted to Brazil, where growers have little intention of making new sales, even with the end of the US surtax. Certified stocks of arabica on the ICE remain above 400,000 bags. After months of decline, ICE certified Arabica stocks showed a slight recovery, with certified Arabica stocks at 439.2 thousand bags, with a positive monthly variation of 9.51%. In the same period, certified robusta stocks closed at 690,800 bags, i.e. despite the recent drop, stocks remain above the beginning of the year and the previous year, indicating greater overall availability in 2025.
In addition, the situation of low stocks is repeated in destination markets. Stocks in the European Union (EU) and Japan, important markets, are also at one of their lowest levels in recent years. The European Federation recorded a drop in September and October to 7.8 million bags, the lowest level since May and 9.1% below the previous year.
In Japan, the Japan Coffee Association's stocks are below 2024 levels and at their lowest for the period. On the other hand, apparent consumption in the EU showed signs of recovery in the 24/25 harvest, finishing above the 10-year average and starting the 25/26 harvest strongly. As a result, strong demand in the Northern Hemisphere winter should sustain consumption and put even more pressure on global stocks.
Geopolitical uncertainties and adverse weather conditions in the countries that produce this commodity are factors that influence the market, generating volatility and impacting the price of coffee in Brazil and around the world.
US President Donald Trump's decision to cease the additional 40% tariffs on Brazilian beans (except instant coffee) on November 20, 2025, eliminated a major geopolitical uncertainty. The suspension of the two tariffs, which included reciprocity tariffs (10%) and national emergency tariffs (40%), allows Brazil to once again compete on equal terms with other coffee exporting countries. Following the exemption, the outlook is for a recovery in coffee stocks in the United States and a downward bias or accommodation of prices on the New York Stock Exchange.
On the weather front, the constant and heavy rains since October, caused by several typhoons and storms, have prevented producers from harvesting coffee and delayed the drying of the beans, as well as causing logistical problems. However, with the reduction in rainfall this month and the normalization of work, more coffee has been arriving on the market.
Furthermore, even with the delay in field work in recent months, Vietnam's coffee exports are beginning to show signs of recovery. In the first two months of the 25/26 harvest (Oct. and Nov.) the Asian country has already exported 2.6 M scs, an increase of 42.2% compared to the same period in 24/25. With higher production expected this year and the harvest finally gaining pace, the country's shipments are expected to continue at higher levels, increasing supply in the coming months.
It is worth remembering that other origins, such as Uganda, Ethiopia, Colombia and the Central American countries are also in their harvest period for the 25/26 harvest, which tends to contribute to global coffee exports and trade flows in the coming months.
Projections for the 26/27 Brazilian crop indicate an increase in coffee production, especially Arabica, after the negative biennial cycle of the previous crop, contributing to the recovery of world stocks in the medium term. Total coffee production in Brazil for the 26/27 harvest could reach between 71 and 74.4 million bags of processed coffee.
Arabica coffee production is projected in the range of 46.5 to 49 million bags for 26/27, a significant increase of 23.3% to 29.9% compared to the 37.7 million bags harvested in the 25/26 cycle. The development of the 26/27 crop faced challenges, such as a period of drought between August and early October, which delayed flowering and caused losses in the first flowers in September. However, abundant rains returned from mid-October, allowing a second flowering and restoring positive expectations. Productivity, however, remains uneven between producing regions.
Conilon coffee production for 26/27 is expected to be between 24.6 and 25.4 million bags. This volume represents a drop of between 6% and 9% compared to the exceptional crop of 25/26, which was 27 million bags. The expansion and renewal of areas under conilon, driven by higher robusta prices since 2023, partially offset the expected drop.
These production estimates have a direct impact on the price of coffee in Brazil. This is because a large crop, especially of arabica, tends to put downward pressure on prices in the long term, easing concerns about global supply. However, uncertainty persists, as the coffee fields are in the crucial phase of filling the beans, which runs from December to March. Rainfall levels during this period will directly influence processing yields. Any unexpected weather adversity during this phase could cause short-term price spikes, even with expectations of higher Brazilian production.
The coffee market is experiencing strong volatility and dynamic movements. Prices are supported by low stocks and the reluctance of Brazilian producers to sell, despite the easing of tariffs. Fluctuations in the market, driven by the weather, supply shocks and geopolitical factors, demand in-depth analysis so that agents in the chain can make informed decisions and mitigate risks.
To navigate this complex scenario and understand how crop projections and stock dynamics affect the price of coffee in Brazil, it is essential to have access to market intelligence. Hedgepoint Global Markets offers detailed analysis of the coffee market and other agricultural commodities, with insights that help anticipate movements and identify opportunities.
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