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Trade4go
Mar 21st, 2025
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Global coffee production for the 2024/25 cycle is estimated at 174.9 million 60-kilogram (kg) bags, with Arabica accounting for 56% (97.8 million bags) and Robusta/Conilon for 44% (77 million bags). Brazil, Vietnam, and Colombia collectively contribute 54.2% of global output, led by Brazil with 51.81 million bags (29.62% of total). These include 34.68 million bags of Arabica and 17.13 million bags of Robusta. Vietnam followed with 30.1 million bags, mainly Robusta (29 million). Exclusively producing Arabica, Colombia is projected at 12.9 million bags. These estimates are from the Feb-25 Coffee Executive Summary by Brazil's Ministry of Agriculture.
A new Food and Agriculture Organization (FAO) report reveals that global coffee prices soared by 38.8% in 2024 due to adverse weather conditions impacting key producers like Brazil, Vietnam, and Indonesia. Arabica prices rose 58% year-on-year (YoY), while Robusta surged 70%, narrowing their price gap to levels unseen since the 1990s. Vietnam’s coffee output fell 20%, while Indonesia’s production dropped 16.5%, causing significant export declines. Rising shipping costs further fueled price hikes, with United States (US) coffee prices up 6.6% and European Union (EU) prices up 3.75% by Dec-24. Experts warn that prices may rise further in 2025 if climate challenges persist, stressing the need for investment in climate resilience and sustainable practices.
Brazil’s coffee production in 2025 is projected at 52.8 million 60-kg bags, a 0.4% increase from the previous forecast but 7.5% lower than 2024 due to a 2.5% reduction in harvested area and a 5.1% decline in productivity. The lower yield is primarily attributed to the negative biennial cycle of Arabica coffee and the hot, dry conditions of 2024. Arabica production is estimated at 34.9 million bags, down 12.8% YoY, while Conilon (Robusta) output is expected to rise 4.9% to 17.9 million bags, driven by improved yields and increased investment in cultivation, particularly in Espírito Santo. Rainfall improvements since late 2024 may support future recovery.
Brazil exported 3.274 million coffee 60-kg bags in Feb-25, a 10.4% YoY decline, while export revenue surged 55.5% to USD 1.19 billion due to high international prices, according to Cecafé. In the first eight months of the 2024/25 season, exports totaled 33.452 million bags (+8.8% YoY), generating USD 9.723 billion (+59.8%). January-February shipments fell 5.4% YoY to 7.287 million bags, but revenue hit a record USD 2.516 billion (+58.4%). The export drop is attributed to Brazil’s off-season and higher domestic prices reducing competitiveness against Vietnam’s Robusta and Central American Arabica. Cecafé warns that lower global consumption and further retail price hikes could impact demand.
The National Coffee Association (NCA) has urged the US administration to exempt coffee from tariffs, warning that duties on Canada and Mexico could raise US coffee prices by 50%. The NCA President emphasized that the US has no alternative to imported coffee, unlike other industries. The coffee sector contributes USD 343 billion annually, with 75% of Americans consuming it regularly. Meanwhile, concerns over the administration’s tariff policies extend beyond coffee, affecting industries like Tesla and the US wine trade, which fears a devastating impact from proposed 200% tariffs on European alcohol.
Coffee cargo theft is increasing in the US as green coffee bean prices reach record highs. Unlike past thefts in producing countries like Brazil and Vietnam, where farms are targeted, US incidents involve organized gangs posing as legitimate transport companies to secure trucking contracts and disappear with shipments. Each stolen truckload is valued at approximately USD 180,000. Industry experts warn importers to vet transporters carefully, while some companies are adopting tracking devices to protect shipments. The issue was a key topic at the recent NCA conference in Houston.
At the Buôn Ma Thuột Coffee Festival, industry experts discussed Vietnam's challenges in meeting the EU’s Deforestation Regulation (EUDR), set for full enforcement by Jun-26. Compliance requires major investments in traceability, production monitoring, and carbon reduction, raising costs for exporters. To address this, the Ministry of Agriculture has integrated four Central Highlands districts into a plantation database, ensuring transparency. Experts urged replanting, sustainable farming, and diversification into specialty and value-added coffee to reduce reliance on the EU. Non-compliance could lead to fines or market exclusion, making adaptation crucial for Vietnam’s coffee sector.
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In W11, Brazilian coffee prices rose 5.84% week-on-week (WoW) to USD 8.52/kg, driven by tight supply from lower Arabica yields, strong demand for premium coffee in key export markets (US, Belgium, Germany), and higher export revenue despite reduced volumes. However, prices dropped 5.12% month-on-month (MoM) following a USD 9.20/kg peak in W7, as a market correction and currency fluctuations took effect. Increased competition from Vietnamese Robusta and Central American Arabica, along with concerns over weaker global consumption and retail price hikes, further pressured prices. Despite short-term fluctuations, the 43.19% YoY increase reflects ongoing supply constraints and climate risks, sustaining market volatility.
In W11, Colombian coffee prices rose 7.79% WoW to USD 9.69/kg, continuing a strong upward trend with a 23.28% MoM increase and a 16.75% YoY gain. The surge is driven by tight global coffee supply, increasing demand, and Colombia’s expanding exports, which have kept prices high despite earlier market corrections. The price rebound reflects strong international interest in Colombian coffee, particularly in premium segments. Despite production expected to reach 14.795 million 60-kg bags, the highest level since 1996, pricing might remain high due to the global shortage and high prices.
In W11, Vietnamese coffee prices showed relative stability, rising 1.37% WoW to USD 5.19/kg, with no MoM change. The market remains under pressure due to a 23.5% YoY drop in exports from Jan-25 to Feb-25, reducing overall trade activity. However, supply constraints persist as Vietnam’s Robusta production hit a 25-year low due to adverse weather, tightening global supply and causing a small increase. Farmers are also withholding sales in anticipation of further price increases, which could support future price gains.
As global demand for premium coffee grows, focus on expanding exports, particularly in markets like the US, EU, and Japan, where coffee consumption remains strong. This will help offset the effects of fluctuating domestic production levels and the potential market corrections in Brazil and Vietnam. Consider increasing investments in specialty coffees and value-added products, such as instant coffee and coffee-based beverages. This will cater to the growing demand for differentiated, higher-margin products, especially in the EU where sustainability and traceability are becoming key purchasing factors.
The rise in coffee thefts in the US due to high coffee prices highlights vulnerabilities in coffee supply chains. Coffee producers and exporters should invest in enhanced security for their shipments, such as Global Positioning System (GPS) tracking and secure transport channels, to protect against potential theft risks. This proactive approach will ensure that high-value coffee shipments are safe and that importers feel confident in securing their supplies.
With coffee prices showing fluctuations, companies should capitalize on price surges by adjusting their pricing strategies to match global market conditions. For example, during periods of tight supply, companies can focus on premium offerings to maintain margins while keeping a close watch on price corrections in the coming months. Conversely, businesses can also hedge against market downturns when prices stabilize or fall, protecting their margins from adverse price swings.
Sources: Tridge, Il Fatto Quotidiano, FAO, Nong Nghiep, Noticias Agricolas, Portal do Agronegocio, SNA, Vina Net, WTO Center
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