SINGAPORE: Brazil’s 2025/26 coffee crop projection reveals a modest overall increase in output, yet contrasting trends between Arabica and Conilon may significantly impact coffee sourcing and pricing strategies in Asian markets. Hedgepoint’s latest report revises Brazilian production to 63.8 million bags, just 0.6% higher than the previous cycle, with Arabica declining and Conilon surging.
Crop Update Details
The new crop update from Hedgepoint highlights regional weather anomalies that are shaping Brazil’s coffee outlook:
- Arabica Outlook Downturned: Production forecasts for Arabica, the premium variety favored in specialty blends, have been cut from 42.6 to 39.6 million bags due to adverse weather. A dry flowering season and above-average temperatures in key areas such as Sul de Minas and São Paulo have stunted bean development.
- Conilon Strengthens: In contrast, Conilon (Robusta), a crucial variety for instant coffee and espresso blends, shows a 20% production increase to 24.2 million bags. Improved rainfall in Espírito Santo and other Conilon regions, paired with infrastructure investments like irrigation, boosted yields and farmer confidence.
- Impact on Processing Yields: Despite early 2025 drought conditions, post-flowering rainfall has improved bean size expectations, potentially enhancing overall processing efficiency, especially in Cerrado and Minas Gerais.
For Asian buyers, this bifurcation matters. Arabica scarcity may tighten supplies and elevate prices, while increased Conilon output could offer relief for volume-driven segments.
“This year’s crop pattern is a tale of two varieties,” said Laleska Moda, Analyst at Hedgepoint. “As Arabica faces setbacks, Conilon’s resilience not only offsets some volume losses but also introduces flexibility into sourcing strategies for large Asian buyers seeking cost-effective alternatives.”
Key Statistics:
- Arabica production down 8.4% from 24/25
- Conilon output up 20% year-over-year
- Arabica exports projected to drop 8.1% to 34.1 million bags
- Conilon exports expected to rise 11.1% to 12.2 million bags
- ABIC retail prices up 102% YoY in Q1 2025
- Domestic demand for Arabica projected to drop by 20.1%, while Conilon usage rises 22.4%
Asian importers, especially in China, South Korea, and Japan, may increasingly blend Conilon to offset rising Arabica costs, driven by weather-induced shortages and high consumer prices.
