Recently, the well-known consulting firm StoneX released its first estimate for Brazil's coffee production, projecting that Brazil's coffee production for the 2025/26 season will reach 65.6 million bags (60 kg/bag), a slight decrease of 0.4% compared with the previous season.

Among this, Arabica coffee production is expected to be 40 million bags, a decrease of 10.5% compared with the previous season, while Robusta coffee production is expected to be 25.6 million bags, an increase of 20.9% compared with the previous season. Although Robusta production increased, it was not enough to offset the decline in Arabica production, so total production still declined slightly.

It is understood that the decline in production is based on Brazil's recent climate being less than ideal, especially in Minas Gerais and Sao Paulo, Brazil's main Arabica-growing regions. Earlier, Brazil suffered its most severe drought in recent years, with almost no rainfall in Brazil's main coffee-growing regions, and rivers and reservoirs drying up and water levels dropping, leading to water shortages.

Although rainfall began to resume in Brazil in mid-October, extreme stormy weather appeared in Sao Paulo, bringing a serious flood threat along with record-breaking strong winds. Although the rainfall can alleviate the problem of soil drought, the wind was too strong and affected the growth of coffee trees.

In addition, Minas Gerais, Brazil's largest coffee-producing region, was severely damaged during the drought, with very scarce rainfall, and some areas even set a record of more than 160 days without rain. According to Fundacao Procafe, a coffee research institution in Minas Gerais, before the rainfall resumed, the soil in Minas Gerais' main coffee-producing areas was short of 250 mm compared with normal values, the second-largest water deficit on record.

However, by October to early November, Minas Gerais also began to see rain, but the rainfall was very sparse. According to the meteorological experts at Climatempo, the average rainfall in October was 63.4 mm, far below normal rainfall levels. Even by November, rainfall remained insufficient, and the weather in the region is forecast to become even hotter over the next 10 days, with temperatures possibly reaching 35°C, and conditions will be relatively drier as well.

This is unfavorable for the upcoming coffee fruiting stage, so many institutions believe it is almost impossible for coffee trees to recover to maximum production. Affected by this, multiple institutions believe that Brazil's Arabica coffee production will decline by more than 10%, and in recent days Arabica coffee futures prices have also continued to rise due to news of reduced Brazilian coffee production.

On the contrary, the weather conditions in Espirito Santo, Brazil's largest Robusta coffee producing state, have improved, with rainfall reaching more than 100 mm, which has greatly alleviated the drought in the region and is beneficial to Robusta coffee growth, so there is a trend of increased production.

However, recently there has been very good news for Brazil's coffee industry: the European Parliament approved the decision to postpone the implementation of the "EU Deforestation Regulation (EUDR)" by one year, and the law will begin to be implemented on December 30, 2025. The EU accounts for about 20% of Brazil's coffee exports, so the delay of the bill gives Brazil more time to meet the requirements of the bill.

In addition, the parliament also adopted a "no-risk country" concept, creating a new category for countries that are developing stable or growing forest area; countries in this category will face more relaxed regulatory requirements, but at the same time it increases the uncertainty of EUDR regulation.

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