Despite high prices for commodity coffee, Brazil’s domestic demand for specialty coffee continues to grow. Photo credit: Wikimedia Commons
After several years of below-average production, Brazil’s next harvest is expected to be a bumper one. The world’s biggest coffee grower has a correspondingly large influence on the wider industry, and extreme harvest predictions can cause the futures market to rise and fall accordingly.
The coffee commodity futures markets for both arabica and robusta spent two years sitting at or close to record highs as a result of tariffs, supply chain issues, and lower production due to climate change. But prices have begun to fall in recent months as reports of a considerable 2026/27 harvest in Brazil — possibly as much as 37.5% higher than the year before.
Rapid Growth
While the bulk of Brazil’s production is still commodity grade, quality is a growing focus for many farmers. A recent USDA report noted that the country’s specialty coffee production has “experienced rapid growth” over the past few years, due to efforts by industry and government entities to promote Brazilian specialty coffee abroad.
The “Brazil: The Coffee Nation” project is a long-running promotional initiative led by the Brazilian Agency for the Promotion of Exports and Investments and the Brazilian Association of Special Coffees. It seeks to “expand Brazil’s global leadership in specialty coffees and boost exports,” according to the USDA report.
Growth in Brazil's specialty coffee market is also driven by increased interest among domestic coffee drinkers. “In the last 10 years, more farmers are worried about the quality of their beans because they receive a better price for quality,” says Jonas Ferraresso, a coffee consultant and agronomist. “They are trying to produce better coffee, not only to match the needs of the international market, but [also] for the domestic market.”
Domestic Drinkers
As well as growing more coffee than any other country, Brazil is the world’s second-largest consumer behind the United States. Demand dropped slightly in recent years, the Brazilian Coffee Industry Association reports, as high prices reached grocery store shelves. Between January and August 2025, roasted and ground coffee prices rose 38.39%, according to data from the Brazilian Supermarket Association.
“The high international commodity prices the industry has seen in recent years can negatively impact specialty production in Brazil,” Ferraresso says. “For example, traders can be less willing to pay a significant quality premium when the price baseline remains elevated.”
At the same time, it is more expensive and more complicated to produce specialty-grade coffee, which can dissuade farmers from focusing on it as much when commodity prices are high. “They might say, ‘Okay, instead of doing 50% of specialty beans on my farm, I will start to do 10% or 20% less because I can easily find a way to sell my traditional coffee beans for a good price,’” he explains.
Continued Specialty Expansion Forecast
However, specialty coffee production in Brazil is forecast to continue growing. The USDA report states, “The trend is for growth in the specialty coffee segment, with increasing international demand for quality, traceability, and sustainability.” This growth, the report noted, will come from “strong international demand, quality improvements, and targeted promotion.”
Ferraresso anticipates that the domestic specialty market will also continue growing. “Rising supermarket prices have narrowed the gap between mainstream beans and specialty coffee,” he says, “so it is less of a jump to higher-quality coffee now than it once was.”