Brazilian coffee monthly update: August 2025

In July, Brazil exported 2.7m bags of coffee (60kg), a 5% increase compared to June but 28% below the volume recorded in July 2024. Exports remain sluggish, totaling 22.2m bags YTD, a 21% decline compared to the same period last year.

The US remains Brazil’s top buyer, with 3.7m bags, despite an 18% drop compared to 2024. Starting in August, exports to the US are expected to slow due to the 50% tariff imposed on Brazilian coffee. US industry players are likely to rely on existing inventories (30-90 days) before resuming purchases, hoping for a renegotiation in the meantime.

The barter ratio has improved slightly in August: 1.6 bags (60kg) of coffee are now needed to purchase one metric ton of fertilizer (20-05-20 blend), compared to 1.7 bags in both July 2025 and August 2024. Rising coffee prices have driven the improvement, offsetting the increase in fertilizer costs, particularly urea.

Since early August, coffee prices have reversed the downtrend seen since March. By August 13, arabica prices in Brazil had risen 4% compared to July, while conilon gained 13%. Several factors may have contributed to this recent appreciation, as bullish risks persist: Inventories remain low, exports have underperformed in some producing regions, and recent light to moderate frosts in Brazil, especially in the Cerrado Mineiro region, have raised concerns about the next harvest.

Geopolitical and regulatory uncertainties also linger, including disruptions in the Red Sea, US tariffs, and the EU Deforestation Regulation (EUDR). The EUDR prompted early purchases in 2024, and its impact on 2H 2025 prices will depend on compliance and import behavior. Some stockpiling has already been observed in recent months.

The 50% US tariff implemented on August 6 adds short-term volatility. Full substitution of Brazilian coffee is unlikely due to its role in many blends, but the tariff reduces Brazil’s competitiveness, favoring other origins amid tight inventories. This measure could reshape global coffee trade flows, with significant implications for producers, exporters, and consumers, including increasing transportation costs in the future.

July and early August brought lower temperatures and episodes of rain and hail in some producing regions. Despite these challenges, the outlook for the upcoming national harvest remains positive. Harvesting is progressing well, with private sector reports indicating that over 80% of the arabica crop has been harvested and that the robusta harvest is nearly complete.