Severe weather has significantly impacted coffee production in Brazil and Vietnam. Coffee prices are soaring as global supply from South American countries declines. With Brazil and Vietnam facing production setbacks, African coffee producers are likely to benefit from rising prices.

Adverse weather conditions affect coffee production in Brazil

Coffee production in Brazil and Vietnam has been hit by adverse weather, impacting global supply. This scenario could shift the market in favor of African coffee producers. Brazil, the world’s leading coffee supplier, is currently grappling with a worsening drought expected to further reduce optimal harvest yields this year.

Since April 2024, rainfall in Brazil has been below necessary levels, impacting coffee tree flowering and thereby reducing overall production. According to the ICE, arabica coffee stocks have dropped dramatically to their lowest levels in four months. As of October 3, ICE reported just over 795,870 bags of arabica coffee in stock a historically low level. Similarly, robusta coffee stocks have reached their lowest point in four months, according to the International Coffee Organization.

Increased sales at higher prices in Africa

As the world’s first and second-largest coffee suppliers, production cuts in Brazil and Vietnam are expected to affect global supply, subsequently raising demand for African coffee.

Africa’s main coffee producers are Kenya, Uganda, and Ethiopia. Industry experts predict that these countries can expect increased sales at higher prices. Consequently, farmers in these East African economies may see higher prices for their products, boosting export revenues.

A similar scenario occurred in 2021 when frost reduced Brazilian production and prices rose in East Africa. Price increases are already noticeable, with Kenya reporting a steady rise in coffee prices since the most recent auction in October 2024.

In Kenya, a 50-kilo bag of arabica coffee once sold for 241 USD, but market data now indicates a price of 256 USD at the latest auction. Similar price hikes are observed in Ethiopia and Uganda, East Africa’s largest coffee exporters.

Record coffee sales across East Africa

Throughout Ethiopia, producers earned a record 1.43 billion USD in coffee export revenues in the 2023/24 fiscal year after exporting more than 298,500 tons, according to the Ethiopian Coffee and Tea Authority.

Likewise, during the most recent auction, Uganda recorded its highest foreign currency revenue from coffee exports in over 30 years. The country earned 1.14 billion USD from coffee exports in the 2023/24 season, up from 846 million USD previously. Uganda exported 6.13 million bags of coffee over this period, an increase from 5.76 million bags in the previous year.

With Brazilian production expected to decline further, East African exporters are likely to see continued demand growth, driving revenue across the region.

Brazilian coffee production for the 2025/2026 season at risk from climate conditions

Brazil is by far the world’s top coffee producer, accounting for roughly one-third of global production. The country’s coffee plantations cover around 27,000 square kilometers, with 90 % of exports consisting of arabica, a highly sought-after variety.

These plantations stretch from the southern plains of Paraná to the famous state of São Paulo. In Minas Gerais, a region larger than Kenya, arabica coffee plantations span vast distances. Minas Gerais is home to 50 % of Brazil’s total coffee harvest and produces over 65 % of the country’s total arabica yield.

However, ongoing droughts in Brazil and forest fires are having severe consequences for early 2025/2026 production. A market report from a local university indicates close monitoring of Brazilian coffee plants’ growth under adverse weather conditions. It is already apparent that coffee flowers have stopped blooming, which means they will not develop into coffee cherries or will produce fewer and lower-quality cherries.

Global coffee prices : Rising steadily as forecasted

Felippe Serigati, coordinator of the master’s program in agribusiness at the Getúlio Vargas Foundation, told the press, « This could lead to a smaller coffee harvest. As the market tends to anticipate these movements, we’ve already seen arabica coffee prices in New York and robusta in Europe trading at higher levels ».

In August of this year, the International Coffee Organization’s composite price indicator, which combines prices for various types of green coffee beans, averaged 2.38 USD per pound an increase of nearly 55 % compared to the same month last year.

Although coffee prices haven’t reached the global records of the late 1970s, when severe frosts destroyed over 70 % of Brazil’s coffee plants, Serigati notes a sharp rise in recent years. Without weather improvements, prices are only expected to increase further.