Global coffee prices are declining

Coffee prices are falling due to favorable weather in Brazil. However, the decline in market prices is discouraging Brazilian farmers from selling, making it difficult for exporters to accept new orders.

To some extent, when market prices fall, purchases from Europe and the US enter the market, thus supporting prices and making a sudden price drop unlikely.

According to data from the Brazilian Ministry of Trade, Brazil’s 2025 production is declining, resulting in farmers having very little stock left. Exports in January 2026 are expected to be about 42% lower than the same period last year.

Trade in 25-year-old Brazilian coffee is expected to end earlier than in previous years.

Given the current situation of lower Brazilian coffee production, it is undeniable that the amount of Brazilian coffee distributed this year will be less than last year, and coffee prices will fluctuate due to market prices and exchange rates. However, it should be noted that the distribution of Brazilian coffee from autumn to winter this year is expected to be lower than last year.

In early February, major Japanese roasters began one-off purchases of Brazilian commercial products, as Brazilian stocks in Japan are almost depleted. The next time commercial products can be traded in Hong Kong will be after August.

According to information provided by Brazilian exporters, this year’s (2025) inventory is almost depleted, and trading will undoubtedly end earlier than in previous years.

This year’s harvest (June to August) is expected to arrive around January 2027.

In this scenario, even if the coffee market declines, trading prices are expected to fall due to extremely low physical inventory, with the worst-case scenario being shortages and people being placed on waiting lists for the next harvest.

Brazilian specialty-grade products are particularly worrying. Even better, it is believed that the number of imports this year will be lower than last year.

Tanzania’s exports decreased significantly due to a poor harvest last year, so there is no doubt that imports to Japan will also decrease significantly.

Currently, there is no problem because it is the time when new crops are available, but note that there is a high probability of product shortages starting this summer, and prices will rise.

The Colombian Coffee Producers Federation reported that coffee production in January was down by approximately 34% compared to the same period last year.

Therefore, regardless of the coffee market situation, local trading prices in Colombia are at a high level.

Domestic inventory in Japan has also decreased significantly due to purchases by large roasters and has been idle since May. Please note that commercial Supremo products are currently almost entirely unavailable in Japan.

According to information from Ethiopia, production in the southern, Sidamo, Guji, and Ilgachafe regions is expected to decline significantly this year (approximately 20-30%). Furthermore, due to strong inquiries from Europe and the United States, especially for specialty products, prices in Ethiopia are rising; therefore, please exercise caution.

The quantity of cleaned goods from Ethiopia is even more severely and significantly reduced, resulting in considerably higher prices for luggage this year.

Due to the impact of the cyclone last November, logistics for Indonesian Arabica coffee were disrupted, and arrival dates were uncertain.

As a result, most of the inventory held by trading companies in Japan has been sold out. According to the latest information, the next arrival time for Mandarin G-1 is after June.

Not only in Sumatra, but also on other islands, Arabica coffee prices have risen sharply due to the cyclone.

As a result, company orders are also increasing, and sales may temporarily halt when inventory runs out.

The popularity of caffeine-free products is spreading, with the Japanese domestic market reportedly projected to exceed 6 billion yen by 2025, doubling from 2019 levels. Many restaurant chains are introducing caffeine-free options.

As background, caffeine-free products used to have a weaker flavor, but technological innovations have improved the taste. It’s said that more people are paying attention to the overall caffeine intake in their beverages because they are taking caffeine consumption into account.