Brazil has during recent months been grappling with inflation, with essential goods such as coffee particularly affected by unusual weather events, low stockpiles, and rising prices.
Just last month, President Luis Inácio Lula da Silva’s approval rating dropped to 24%: the lowest it has ever been during his three terms as President.
One coffee professional told Latin America Reports that the industry in Brazil is facing its worst situation in at least 50 years.
Brazil hit by climate change, inflation
At the end of February, the Financial Times reported that higher coffee prices were causing discontent amongst the Brazilian population, with some citizens blaming President Luiz Inácio Lula da Silva for the almost 40% rise in coffee prices that emerged over the past year. One 49-year-old driver told the FT that he was “astonished” that one 1kg bag of coffee cost USD$25, adding: “I blame the government.”
While inflation has affected most products, with the average price of a basket of 12 groceries increasing by 14.2% between December 2023 and 2024, the price of coffee has been disproportionately affected, largely due to climate-related issues which have led to low supply and high consumer prices.
Last year saw Brazil’s hottest year on record and severe drought which led to a significantly lower yield of coffee beans. Now, many of Brazil’s coffee farmers have sold the vast majority of their beans, months ahead of the upcoming harvest.
Willian Cesar Freiria, the sales manager at Cocapec—Brazil’s third largest coffee cooperative—told Reuters last month: “We never had such low stocks in February, a period that is still distant from the new crop. He added: “Until the start of the next harvest we won’t have much coffee to sell.”
Luiz Fernando dos Reis, the sales superintendent for Brazil-based Cooxupé—the world’s largest coffee cooperative—told the news agency that coffee farmers have already sold 90% of the 2024 crop, adding: “What they have left is the lowest amount we ever saw in our records.”
The challenges facing Brazilian coffee companies
Cafés do Brasil Club is a Brazilian company which offers subscriptions to coffee “experiences”. Customers can choose whether they want to subscribe to a monthly “beginner”, “intermediate”, or the expert “taster” package which will include high-quality, sustainably-sourced coffee. Clients can choose how much coffee to receive, and whether to receive the coffee as whole beans or ground.
The Club employs “coffee hunters” who are responsible for identifying and sourcing the best quality coffee for the company to provide to its customers.
Kelly Ferreira is one of these coffee hunters, and she claims her job has become significantly harder over the past year. She told Latin America Reports that drops in both the “quality and quantity” of coffee in Brazil are “directly connected to climate change”, citing unusual rain patterns and temperatures as specific factors.
Additionally, she said that one of her “biggest challenges” at the moment is trying to follow the market at a time when it is “constantly changing.”
The Club has been forced to increase its own prices in order to reflect its own growing costs incurred by sourcing coffee. Letícia de Vasconcelos, Cafés do Brasil Club’s head of marketing, told Latin America Reports that this has led to a decline in the company’s customer base. The Club has lost 100 clients since February alone, she explained.
Another challenge faced by the Brazilian coffee industry, Ferreira said, is the growing competition created by foreign coffee imports. Previously, coffee imports from abroad would face tariffs of 10%. However, the Brazilian government has recently decided to abolish tariffs for food products considered essential: a category which includes coffee, olive oil, sugar, and sunflower oil, amongst various other products.
Ferreira explained that, while the move might offer temporary relief, local farmers are likely to find themselves in a market which is “a lot more competitive” because of it. She thinks that the market would benefit from “more regulation”, and added that the quality of coffee imported from abroad is often of worse quality than that grown in Brazil.
Ferreira believes these are the worst conditions the Brazilian coffee industry has faced in at least 50 years. While the country has previously been affected by weather events, such as low rainfall and “scarcity” of coffee stockpiles in 2021, she says the impact this year has been even greater.
The Club believes the current situation must act as a “critical moment for negotiations between buyers and sellers” who should seek to “improve partnerships” with one another.
The situation elsewhere in Latin America
Brazil is not the only Latin American country whose coffee stocks have been affected by weather conditions. At the end of February, the New York Times spoke to Marysabel Caballero and her husband Moises Herrera – owners of Finca El Puente coffee plantation in Honduras.
The couple reported several strains: they have had to increase wages in order to attract workers, of which there are few; fertilizer has become more expensive; their crops have been harmed by extreme weather conditions such as rains at unexpected times and volatile temperatures. Herrera said, “For us, producing coffee is our life”, adding, “A lot of producers are starting to lose hope.”
In 2024, local media reported that Mexico’s coffee production was expected to decrease by 50% that year. The drop was yet another consequence of drought. One producer from Chiapas declared at the end of the year: “The plant is green, but it is not producing the coffee it should”, according to Forbes.
Colombia and Costa Rica, on the other hand, have experienced increased coffee yields.
Colombia’s country’s coffee production levels reached a record high in 2024, experiencing an increase of 23% on the previous year. Meanwhile, Costa Rica was predicted to experience an 8.6% increase in the amount of coffee harvested in the 2024-25 period, compared to the previous year.
Featured image provided by Cafés do Brasil Club.
