Coffee futures prices down during the first week of December, USDA cuts its estimate for the 2025/26 Brazilian crop by 2 million bags

MILAN – Production and financial fundamentals pushed coffee futures lower in the last session of the week. On Friday 5 December, both markets closed in negative territory, with a more pronounced correction in New York, where the main contract (March) lost almost 1.5%, closing at 374.34 cents. It was a week-long decline for London, where the contract for January delivery has lost 5.9% since the beginning of the month, ending the first week of December at $4,295.

The agreement reached between the European Parliament and the Council for a further postponement of the EU Deforestation Regulation (EUDR), along with a commitment to a targeted review of the law’s provisions, helped ease market tensions.

Another bearish factor was the upward revision of Conab’s official estimate of the 2025/26 Brazilian harvest for both Arabica and Robusta.

Production is now estimated by the Brazilian agency at 56.5 million bags, up 4.3% compared to 2024/25. This is the third largest Brazilian harvest ever, at least according to Conab’s metrics.

Also last week, the United States Department of Agriculture (USDA) published data on the Brazilian crop that differs significantly from that of CONAB. In fact, the new semi-annual report by the USDA’s Foreign Agricultural Service focusing Brazil has cut its production estimate for 2025/26 by 2 million bags, reducing the Arabica estimate by 2.9 million and simultaneously raising the Robusta estimate by 900,000 bags.

The harvest is now pegged at 63 million bags, compared to 65 million in 2024/25. Arabica production is down to 38 million, from 44 million in the previous year, a 13.6% decrease. Robusta production, on the other hand, is up 19% (+4 million) to a record 25 million.

Brazil continues to experience erratic and unpredictable weather patterns, characterized by drought, insufficient rainfall, and cold fronts that can lead to frost and hail on coffee farms in the main producing areas. This has led to a significant reduction in Arabica production in 2025/26.

After promising rains in January and early February, a new period of drought set in in Minas Gerais and São Paulo, which had a further negative impact on yields.

Favourable weather conditions, on the other hand, supported the growth of the Robusta crop, particularly in Espírito Santo and Bahia, contributing to unprecedented production levels and bringing Brazilian Robusta production even closer to that of Vietnam.

Harvesting began slowly in April in the Robusta production areas and in May in the Arabica production areas, ending in October. In Minas Gerais, the largest Arabica-producing state, production fell by 15.5% to 26.7 million tonnes, compared to 31.6 million tonnes in 2024/25. Heat waves, irregular rainfall and drought had a negative impact on crop development.

A record Robusta harvest, on the other hand, boosted production in Espírito Santo, which reached 21.2 million (+14.6%). Robusta production amounted to 18 million bags, up 22.4%. This unprecedented result was made possible by favourable weather conditions and significant investments supported by higher prices. It is important to note that 70% of Robusta crops are managed using irrigation. Unfavourable weather conditions, a decline in cultivated areas and high pruning rates led to a 15.8% decrease in the Arabica harvest, to 3.2 million.

Insufficient rainfall and high temperatures during the crop development phase had a negative impact on the São Paulo harvest (100% Arabica), which fell by 9.4% to 4.8 million.

Export forecasts for 2025/26 have been lowered by one million bags to 40.75 million, compared to 44.75 million in 2024/25. Between January and September this year, exports amounted to 29.105 million, down 20.5% from 36.593 million exported in the same period in 2024.

Due to tariffs imposed by the American President Donald Trump, September exports to the US fell by more than 50%, with the United States ranking only third among destinations for Brazilian coffee, behind Germany (654,638 bags) and Italy (334,654 bags).

Finally, the report confirms the estimate for domestic consumption in 2025/26, which is expected to rise to 22.28 million (+1.4%), of which 21.3 million will be roasted coffee and 980,000 bags will be soluble coffee.

However, these forecasts may be revised downwards due to retail price hikes, which have already contributed to a 5.5% decline in consumption in the first eight months of 2025.