Heavy rains in Brazil have degraded the quality of the new coffee crop and could lead to a shortage of high-quality Arabica beans on the global market, while futures for this variety have risen by approximately 35% since June, according to Bloomberg.
Brazil is the world’s largest producer of Arabica and accounts for about 45% of global production, so problems with harvest quality could affect the supply of premium coffee far beyond the country’s borders.
The main problem was extremely heavy rainfall during the harvest. In June, rains knocked a large number of ripe coffee cherries off the trees, after which they lay on waterlogged ground for several days, increasing the risk of fermentation, mold, and undesirable flavors.
According to Simao de Lima, president of the Expocacer cooperative—which unites more than 800 producers in the Cerrado Mineiro region in southeastern Brazil—the rains knocked down an average of about 20% of the coffee cherries, compared to the usual 5–7%.
Thus, this does not represent a 20% loss of Brazil’s entire harvest, but rather significant damage to the crop in one of the most important regions for the production of high-quality Arabica.
The situation was exacerbated by a second wave of rainfall in July. The rains fell on beans that had already been harvested and laid out to dry, forcing some producers to start the drying process all over again.
According to data from the meteorological company Vaisala, rainfall in certain areas of Brazil’s coffee belt in June and July reached 250–500% of the climate norm, and in some places, up to eight times more rain fell than usual.
Quality issues are already affecting the market. Arabica futures have risen by about 35% since June, offsetting a significant portion of the price decline since the beginning of the year.
In the physical market, high-quality Brazilian coffee is selling at a premium of up to 15 cents per pound compared to futures in New York.
The reduction in the volume of coffee meeting the delivery standards for Intercontinental Exchange (ICE) certified warehouses in the U.S. and Europe could prove particularly significant.
In a typical year, approximately 30–35% of the Cerrado Mineiro region’s production meets ICE requirements. Following this year’s rains, de Lima estimates that this share could drop to 10–15%. Meanwhile, coffee stocks in ICE-certified warehouses are already approaching their lowest levels of this century.
This could intensify competition among international roasters for high-quality beans. Bloomberg notes that Brazilian Arabica is used, in particular, by companies such as Starbucks, Lavazza, and Illy.
However, it is still too early to speak of a general coffee shortage. The U.S. Department of Agriculture expects that in the season beginning in October, global coffee supply will exceed consumption by approximately 10 million bags, which would be the largest surplus in six years. One of the main factors is expected to be record production in Brazil itself.
Therefore, the market’s main problem lies not so much in the total volume of coffee as in the availability of high-quality Arabica. Major producers can partially offset the shortage by adjusting the composition of their coffee blends and sourcing beans from other regions; however, for the premium segment, the situation could lead to further increases in purchasing and retail prices.
Weather remains an additional risk for the market. Reuters notes the intensification of the El Niño phenomenon, which in the 2026–2027 season could further increase volatility in the markets for coffee, cocoa, and other tropical agricultural commodities.
