Brazilian Coffee Industry In Crisis, Hit By Inflation, Dwindling Stockpiles, Climate Change And More – CoffeeTalk

Brazil has been grappling with inflation, with essential goods such as coffee being particularly affected by unusual weather events, low stockpiles, and rising prices. President Luis Inácio Lula da Silva’s approval rating dropped to 24% last month, the lowest it has ever been during his three terms as President. A coffee professional told Latin America Reports that the industry in Brazil is facing its worst situation in at least 50 years.

Last year saw Brazil’s hottest year on record and severe drought, leading 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. Cafés do Brasil Club, a Brazilian company that offers subscriptions to coffee “experiences,” employs “coffee hunters” who are responsible for identifying and sourcing the best quality coffee for the company to provide to its customers.

Kelly Ferreira, one of these coffee hunters, claims her job has become significantly harder over the past year. She believes 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. 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.

Another challenge faced by the Brazilian coffee industry is the growing competition created by foreign coffee imports. The Brazilian government has recently decided to abolish tariffs for food products considered essential, including coffee, olive oil, sugar, and sunflower oil, amongst various other products. Ferreira believes that the market would benefit from more regulation, and that the quality of coffee imported from abroad is often of worse quality than that grown in Brazil.

The Brazilian coffee industry faces the worst conditions 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.

In other Latin American countries, coffee stocks have been affected by weather conditions. In 2024, local media reported that Mexico’s coffee production was expected to decrease by 50% that year, which was yet another consequence of drought. Colombia and Costa Rica, on the other hand, have experienced increased coffee yields. Colombia’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.

Read More @ Brazil Reports