Brazil Coffee Prices Diverge Powder Up 81 Percent in a Year While Beans Fall 17 Percent

Despite rising coffee powder prices in Brazilian supermarkets, farm-level coffee bean prices have been dropping since harvest season began in March, signaling potential relief for consumers in the coming months.

According to Brazil's IBGE (Institute of Geography and Statistics), coffee powder was the second-largest contributor to June’s inflation, with prices increasing 2.86% compared to May and showing a staggering 81.6% rise over the past 12 months. However, the farmgate price of Arabica beans, Brazil's most popular coffee variety, fell 17% in June compared to February's record high, according to Cepea-Esalq/USP.

Delayed Price Relief for Consumers
Economists predict that the decline in coffee bean prices will gradually impact retail prices in the second half of 2025. Fernando Maximiliano, an analyst at StoneX Brazil, explained that the process from harvesting and processing to roasting, packaging, and distribution creates a lag in price adjustments. This means it could take 60 to 90 days for consumers to notice meaningful price reductions.

Carlos Cogo of Cogo Agricultural Consulting emphasized that even if prices begin to decline, they are unlikely to return to pre-2024 levels immediately, noting that this is only the “start of a gradual recovery.”

Global Trends Weigh on Bean Prices
The fall in farm-level coffee prices is attributed to both Brazil’s ongoing harvest season, which runs from March to September, and increasing production in Vietnam and Indonesia. The oversupply has pressured global prices. Additionally, surging coffee powder prices in recent months have dampened domestic demand in Brazil, further driving down bean prices.

Another key factor is the soaring production of Robusta coffee beans, which are primarily used in instant coffee and blends. Brazil's National Supply Company (Conab) forecasts a 28% year-on-year increase in Robusta output this season, exacerbating the downward pressure on prices.

Gradual Decline Expected for Coffee Powder Prices
While coffee powder inflation is expected to soften in the coming months, cumulative inflation over the past year will keep retail prices elevated. Analysts caution that even as prices start to decline, consumers should prepare for prolonged high costs before significant relief is felt. If the 2025 harvest proves favorable, prices could stabilize or even drop significantly by 2026.