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2024: Brazil's drought meets empty warehouses — coffee's 14-month rally

Apr 2024 – Mar 2025

The lesson: Drought trimmed Brazil's crop — but near-empty warehouses turned a bad harvest into a 14-month rally that nearly doubled arabica. When inventories are thin, weather gets priced twice.

What happened

Rainfall in Brazil ran below average from April 2024 — the driest stretch since 1981 (Cemaden, via Nasdaq) — damaging coffee trees through the critical flowering stage. Conab cut its 2024/25 Brazil crop estimate by 4 million bags in September 2024 (to 54.79 million) and again in December (to 54.2 million bags). Arabica exceeded $3.20 per pound in November 2024, the highest in 47 years (Tridge, 29 Nov 2024), then set a fresh all-time high of $4.2995 per pound on 11 Feb 2025 (Reuters). Global stocks sat about a third below their long-term average after two years of production trailing consumption (Marex, via Tridge); Vietnam's robusta drought added a second supply scare.

Weather context
  • Brazil (Minas Gerais coffee centroid) (Apr-Oct 2024): +0.52°C vs the 1991–2020 baseline; rainfall -38.1% vs baseline (195 days with <1mm rain). Rainfall ran 38% below normal at this Minas Gerais centroid across Apr-Oct 2024 (the record's sources call it the driest stretch since 1981), 195 of 214 days under 1mm, and 39 days with daily-maximum temperature more than 3 C above baseline.

One region centroid is illustrative, not field-level truth; baseline is the 1991–2020 day-of-year mean. Weather data provided by Open-Meteo.com.

What everyone expected

With arabica at 47-year highs, 'many producers are hesitant to sell, anticipating further appreciation' (Tridge, 29 Nov 2024) — the market feared the 2025/26 harvest was compromised before it had even flowered.

As reported at the time: Tridge, 29 Nov 2024

What actually happened

  • Coffee
    2024-01 → 2024-11 · KC=F month-end closes
    +65.8%

    Drought priced in through the Brazilian spring.

  • Coffee
    2024-01 → 2025-03 · KC=F month-end closes
    +95.7%

    Fourteen months, nearly a double.

  • Coffee
    2025-03 → 2025-06 · KC=F month-end closes
    -19.2%

    First relief: rains returned and longs took profit.

Month-end closes miss the $4.2995 per pound February 2025 intraday peak, so the monthly series understates the top. Vietnam's concurrent robusta drought confounds a Brazil-only reading.

The assessment

Unlike a single-season grain shock, this was a slow burn: the damage was to future flowering, not a standing crop, so the rally stretched across two harvests. The amplifier was inventories — two deficit years had drained the buffer before the drought arrived, and Volcafe's warning of an 'unprecedented' fifth straight global deficit in 2025/26 (Reuters, Dec 2024) kept bids alive into 2025. Relief came from weather, not policy: above-normal rains in early 2025 eased the dryness fear.

How this record has changed

Living document — every material change is logged here, newest first.

  1. New evidence2026-09-23

    The post-drought selloff deepened to 3-month lows on September 21-22: December arabica (KCZ26) closed at 276.40 cents per pound (-4.10c, -1.46%) on September 21 and November robusta (RMX26) fell 2.52% on September 22 (Barchart). New bearish drivers: Somar Meteorologia reported 33.4mm of rain in Minas Gerais in the week ended September 20 — 242% of the historical average — during the critical flowering stage, and ICE robusta inventories rose to a 9.75-month high, while Vaisala reported improved soil moisture in Vietnam's Central Highlands. Since August 25 at 335.50 cents, December arabica has lost 59.10 cents (about 17.6%) (farmingportal.co.za, September 22). New counter-risks: hail damaged coffee farms in southern Minas Gerais during flowering (CocoaIntel, September 17), and unusual weather has triggered early 2027-crop flowering in Brazil (farmingportal.co.za, September 22).

    Barchart, 21 Sep 2026 · Barchart, 22 Sep 2026 · farmingportal.co.za, 22 Sep 2026 · CocoaIntel, 17 Sep 2026

  2. New evidence2026-09-21

    The drought-driven rally fully unwound on record supply: the ICO projected a record 2025/26 global crop of 183.6M bags (+4.4% y/y) against consumption of 180.6M bags (−0.9% y/y) — a 3M-bag surplus, the first in five years — and USDA forecast a record 2026/27 global output of 189.7M bags, with Brazil's crop at a record 71.9M bags (+14% y/y) (Barchart, Sep 17, 2026). Arabica fell to a 2.5-month low by mid-September on record Brazilian August exports of 4.155M bags (+31% y/y).

    Barchart, 17 Sep 2026

  3. New evidence2026-09-17

    Added ERA5 weather reanalysis context for Apr-Oct 2024 at the Minas Gerais coffee centroid: +0.52 C mean temperature anomaly vs the 1991-2020 baseline, rainfall 38.1% below normal, 195 of 214 days under 1mm. Computed 2026-09-17 from the v1_2026-09-15 raw daily series with the same window_anomalies() method (addendum CSV in research). Attribution: weather data provided by Open-Meteo.com.

    Morrowfly research vintage v1_2026-09-15 + 2026-09-17 window addendum (ERA5 reanalysis via Open-Meteo)

  4. Correction2026-09-15

    Seed revision marking this record as published under the adversarial-review standard established 2026-09-15: outcome figures recomputed from Morrowfly's own month-end price history, intraday peaks confined to mechanism prose, and no bare '%' figures in narratives. Applied at creation, before any public revision.

    Morrowfly internal adversarial review standard (15 Sep 2026)

Transmission

  • Coffee
    production loss

    Brazil is about a third of world coffee exports; the drought hit arabica during flowering for the 2025/26 crop (Conab, Sep 2024; Cemaden via Nasdaq).

Sources

Notes

  • Prices are month-end closes from our series unless noted; windows are labeled beside each number.
  • Secondary press quotes are reported as published and were not individually audited against primary sources.
  • Illustrative scenario record. Not a prediction. Not financial advice.