Industry Insight: How Brazil Moves the Price of Coffee

On the morning of 20 July 2021, farmers across Sul de Minas woke to find their coffee trees scorched black. A run of cold fronts had swept up from the south, bringing Brazil its coldest weather in over 30 years. Unlike the famous frosts of the 1970s, which were mostly confined to Paraná, this one reached deep into Minas Gerais and the Cerrado Mineiro, the heart of Brazilian Arabica (Daily Market Trends).

Thousands of miles away in New York, the price of coffee was already climbing. Within a year, Arabica futures had doubled (Arab News). A few nights of frost in one country had changed what roasters everywhere paid for their coffee, and it’s a pattern that has repeated itself throughout coffee’s history.

A price set in New York

The number that rose that week was the C-price, the benchmark futures price for Arabica. It’s traded on the Intercontinental Exchange (ICE) in New York and quoted in US cents per pound, while Robusta has its own market in London. Very little of the coffee traded on the exchange ever changes hands as physical beans, but the C-price is the reference point for coffee deals around the world. Most green coffee, specialty included, is sold at a differential: a premium or discount on the C-price that reflects its quality, origin and processing.

That means a carefully processed Ethiopian microlot and a container of commercial Brazilian coffee are, in the end, priced against the same benchmark. The single biggest force acting on that benchmark is Brazil.

One country, nearly half the world’s coffee

Brazil produces nearly 40% of the world’s coffee, and an even larger share of its Arabica (USDA, July 2026). When its harvest grows or shrinks, the world’s coffee supply moves with it.

This year shows that effect clearly. After five years of weather-hit Arabica crops, the USDA expects Brazil to harvest a record 71.9 million bags in 2026/27, with Arabica alone up 9.5 million bags (USDA, July 2026). That rebound is a large part of why world production is forecast to reach a record 189.7 million bags (Tridge).

When the weather turns

Concentration on that scale means risk on the same scale. The best-known example is the black frost of 1975, which all but wiped out coffee in Paraná, then one of Brazil’s biggest coffee states (Daily Coffee News). The following harvest fell by around 60%, and prices tripled over the next two years (Bizcommunity). The frost also reshaped Brazilian coffee itself, as growing moved north into Minas Gerais and the Cerrado, which went on to become the country’s main producing regions (Times Brasil).

Drought works more slowly but just as powerfully. In 2021, the frost hit crops that were already suffering after Brazil’s worst dry spell in 91 years, and it was the combination of the two that sent prices so high (Arab News).

The rhythm of the harvest

Even in a calm year, Brazilian Arabica rarely produces the same amount twice. A tree that crops heavily one season tends to rest the next, so the harvest moves between larger “on” years and smaller “off” years. Traders build that rhythm into their expectations, and the current record crop lands on the high side of the cycle, helped by good weather (Daily Coffee News).

The real and the dollar

Coffee is priced in dollars, but Brazilian farmers pay their workers, fertiliser bills and loans in reais. When the real weakens, the same dollar price is worth more at home, and farmers and exporters become more willing to sell. That extra selling can pull the C-price down, and it happened again just this week, when a weaker real was cited as one of the pressures on Arabica (Business Recorder).

A market that trades on expectations

The market doesn’t wait for the coffee to be picked. Conab, Brazil’s national crop agency, publishes several forecasts each season, and each one is watched closely. Its estimate for the 2026 harvest has risen from 66.7 million bags in May (StoneX) to 67.6 million, mainly due to a projected 34.8% jump in Arabica (CropGPT). Private analysts put the crop higher still, with Marex forecasting as much as 75.9 million bags (Trading Economics). Investment funds, many of which never take delivery of a single bag, buy and sell on every forecast and weather warning, which can push prices further and faster than physical supply alone would.

That’s why a record crop doesn’t automatically mean cheap coffee. Arabica peaked at just over $4.30 per pound in February 2025 (Business Recorder), and despite this year’s bumper harvest it was still trading at around $2.95 this week. Dealers remain nervous about short-term supply, with coffee stocks in ICE’s certified warehouses not far from 27-year lows (Business Recorder).

What this means for us, and for you

We feel every one of these swings. When the C-price moves, the cost of green coffee moves with it, and that includes coffees from origins nowhere near Brazil, because so much of the world’s coffee is priced from the same benchmark.

For our staple, year-round coffees, we try to lock in prices when the market dips, so we can keep them steady for as long as possible. That isn’t always an option: sometimes prices stay high for months, or the coffee we want isn’t available to buy ahead, and our prices have to follow the market.

So if a familiar coffee changes price, the reason usually isn’t the coffee itself. More often it’s a cold night in Minas Gerais, a new Conab forecast or a shift in the real, felt all the way along the supply chain to your roaster.