Brazil Pours Record Funds Into Coffee Sector To Secure Global Lead

(MENAFN- The Rio Times) Brazil, the world's top coffee producer, has committed a record 6.8 billion reais ($1.29 billion) to finance its 2025/26 coffee harvest, according to the Ministry of Agriculture and Livestock.

The Coffee Economy Defense Fund (Funcafé) will distribute these funds through authorized financial institutions, aiming to stabilize production, support farmers, and strengthen Brazil's competitive position in global coffee markets.

Government data show that Brazil's coffee production for 2025/26 is forecast between 55.7 and 65 million 60-kilogram bags, depending on the source.

The National Supply Company (Conab) projects a 2.7% increase over 2024, reaching 55.7 million bags, while the US Department of Agriculture (USDA) estimates a higher figure of 65 million bags.

This growth comes mainly from robusta (conilon) coffee, expected to reach a record 18.7 to 24.1 million bags, thanks to favorable weather and improved irrigation. In contrast, arabica output is set to decline by up to 6.6% due to drought and the natural biennial cycle.



Despite a drop in export volumes in early 2025, Brazil's coffee sector posted record revenues. From January to April 2025, exports totaled 13.81 million bags, generating $5.23 billion, a 51% increase in revenue compared to the same period in 2024.
Brazil Boosts Coffee Sector with Record Investment
This surge reflects higher global coffee prices, not just larger volumes. The United States, Germany, and Italy remained Brazil's largest buyers.

The government's financing package allocates funds across the supply chain: 1.735 billion reais for production costs, 2.49 billion for marketing, 1.615 billion for coffee acquisition, and over 1 billion for working capital in roasting and instant coffee industries.

Another 30 million reais is set aside for recovering damaged plantations. Brazil's coffee sector faces challenges. High input costs and climate risks threaten small and medium producers.

The country's export dominance also faces pressure as Vietnam and Indonesia recover from recent low harvests and regain market share.

Meanwhile, the US has introduced new tariffs that favor Brazilian robusta over Asian competitors, possibly reshaping trade flows. The real story is Brazil's coffee sector is adapting to volatile weather, shifting global demand, and new trade dynamics.

The government's record investment aims to keep Brazil's coffee industry resilient, competitive, and profitable, ensuring its role as a cornerstone of both the national economy and the global coffee market.

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