Every year, Hedgepoint’s market intelligence team publishes an outlook on the world’s main agricultural commodities. In 2025, expert Laleska Moda compiled
Every year, Hedgepoint’s market intelligence team publishes an outlook on the world’s main agricultural commodities. In 2025, expert Laleska Moda compiled comprehensive coverage of global coffee, including data on supply, demand, prices and various other topics relevant to the sector.
The full document can be accessed free of charge by clients on the Hedgepoint HUB, but you can check out the main insights provided by the professional in this article. See below for the points covered and have a good read:
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The coffee market remains challenging for 2025, influenced by climatic factors in Brazil. The country faced a strong period of drought until September 2024, with the rains returning to the producing regions at the end of the year – which favored the development of the flowers and the filling of the beans
“However, the negative impact of the adverse weather throughout 2024 should still be reflected in production in 2025/26. Moreover, despite the heavy rains at the beginning of February, the weather has become dry and hot again in Brazil,” adds Laleska.
For Arabica coffee, the Hedgepoint team expects a drop of 4.9% due to the weather and the reduction in area, with production estimated at 41.1 million bags. Conilon, on the other hand, is expected to recover by 14.3% (23 million bags), reaching 64.1 million bags of coffee. Given the current climate situation, these figures may still be revised.
“Despite this growth, lower stocks may limit exports in the coming months. In terms of total demand, current Arabica prices may fall, but Conilon prices should increase, due to the level of spreads,” says the expert.
Hedgepoint’s outlook provides data on Brazil’s average marketing levels. The December figures show that a large part of the 2024/2025 crop has already been sold, which limits the country’s supply in the coming months.
So far, Brazil has been meeting its demand for coffee. However, the national off-season will see less availability of the bean and a reduced stock, especially for Conilon.
“The decline in supply in other origins should increase total exports for the current coffee season, reaching record levels. However, shipments in the coming months (and in 2025/2026) may be limited – as already reflected in Conilon shipments in January,” Moda points out.
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The analyst points out that production from other origins also contributes to limited supply at a global level. According to the expert, “estimates are that Vietnam will only see a recovery in supply in 2025/26, if the weather is favorable. In addition, with the current rise in prices on the stock exchange and in Brazil, farmers in other countries are holding back, expecting even higher prices.”
In Indonesia, the expected recovery in production will not be enough to make up for the drop in Vietnam. Normally, at this time of year Indonesian exports tend to reduce, while Vietnamese grains enter the market. In Honduras and Mexico, production is expected to be lower, partially offset by Colombia (which is looking for an expected recovery to 12.5 million bags).
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Laleska mentions in Hedgepoint’s annual outlook that coffee prices bring risks to the market. Arabica hit new record highs in February and the recent increase in initial margins on the ICE (Intercontinental Exchange) has also inflated the market.
“At the same time as Arabica spreads are widening, Robusta spreads are narrowing. This retraction reflects the easing of concerns about supply in the short term, especially with the 2024/2025 harvest in Vietnam and the prospect of greater supply in Brazil in 2025/2026. On the other hand, recent concerns on the arabica side may also influence the behavior of robusta prices throughout the year,” the expert points out.
In Brazil, coffee prices have not kept pace with the rise in futures. Moda reports that the country’s domestic prices rose sharply in January, but the basis has fallen back sharply, also reflecting the devaluation of the dollar against the real.
“It’s important to note that in other origins, the differentials for washed arabica have fallen in recent weeks. Among the factors responsible are the peak of the harvest in the central countries and Colombia, rising futures and buyers pushing for better prices,” points out Laleska.
The Brazilian differential, which had been rising sharply, remained stable in February. In the case of robusta, Vietnam’s differentials returned to negative levels, something not seen since 2023 – reflecting an increase in supply and weaker demand than previously observed.
The European Union is at the top of the rankings when it comes to coffee consumption. According to data from Hedgepoint, the region has yet to show signs of weakness in its demand. However, the market intelligence analyst still sees a shift, especially at the beginning of the year.
“As the rise in futures may be passed on to the final consumer in this first quarter, it will be important to assess whether we will see any reaction in apparent EU consumption. In this case, it will also be essential to monitor the movement of European stocks: they ended 2024 on a high, compared to 2023, reflecting the bloc’s voluminous imports in recent months (reflecting the EUDR), but remain below the historical average,” he adds.
The expert predicts a deficit for 2024/2025, resulting in a fourth consecutive year of decline. The projection is that total supply should still remain below demand.
“For 2025/2026, the expected drop in Brazilian production may limit a recovery in supply, although it’s still early days for estimates in other countries. On the demand side, we predict stagnation for the time being, but adjustments could be made in the coming months,” he points out.
With regard to Arabica, consumption is expected to fall. However, due to arbitrage levels, part of this demand may migrate to robusta, especially with the projected recovery of Conilon in Brazil in 2025/2026. On the other hand, an increase in demand for robusta could lead to a further reduction in stocks of the variety.
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In addition to the annual coffee report, Hedgepoint Global Markets will be publishing data on sugar and ethanol, corn and wheat, as well as the blog post already published on soybeans and oilseeds. Follow the releases and stay on top of the key insights for the agricultural commodities market.
You can also access the Hedgepoint HUB and find other reports and analyses for the energy and currency markets
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