Brazilian coffee monthly update: September 2025

- In August, Brazil exported 3.1m bags (60kg) of coffee – down 17.5% YOY but up 14.3% compared to July. Despite the monthly recovery, exporters continue to face challenges, including weather-related impacts on the arabica harvest and a 50% US tariff introduced in August. Additionally, coffee is taking longer to reach exporters this year, despite the good harvest pace.

- According to Cecafé, exports to the US dropped 46% YOY and 26% from July. Still, with 301,000 bags, the US remained the second-largest destination for Brazilian coffee shipments, behind Germany, and is the top global importer in 2025.

- The barter ratio improved significantly in August. Only 1.2 bags (60kg) of coffee were needed to purchase one metric ton of fertilizer (blend 20-05-20), a drop of 29% from August 2024 (1.7 bags) and 26% from July (1.6 bags). The sharp rise in coffee prices in recent weeks – combined with falling fertilizer prices, especially urea – drove the gain for producers.

- After months of decline, coffee prices rebounded sharply in August, with arabica and conilon rising 31% and 32%, respectively. Slower Brazilian exports and low global inventories fueled the rally. However, the implementation of US tariffs in August added further volatility to the market, prompting US roasters to seek alternatives, including other origins. In the short term, the industry is expected to rely on existing inventories while awaiting potential tariff renegotiations. One alternative is using bonded warehouses, which allow coffee storage without immediate tariff payment. Since the tariff announcement on July 9, certified stocks in New York have fallen by 157,000 bags.

- Additionally, the EU Deforestation Regulation (EUDR) drove early imports to the EU in 2024, and a similar pattern may occur in the second half of 2025. European stock data shows European inventories have been building up in recent months.

- August saw seasonally low rainfall. This supported coffee harvesting, which is now nearly complete. However, frost impacted some arabica regions. Cerrado Mineiro appears to have been hit harder. A local cooperative estimates a potential loss of 412,000 bags of the 2026 crop, raising concerns for the next harvest. Despite the reduced productive potential, the outlook for the 2026/27 arabica and conilon cycle remains positive. In the coming weeks, market focus will shift to rainfall and flowering. Any threat to crop potential could support coffee price gains.