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After 18 Consecutive Highs, Coffee Price Falls in July and Trend Is Downward with Advancement of Harvest in the Country
The coffee price fell 0.36% in July, according to the IPCA-15, released by IBGE. This was the first reduction in the price of the product for consumers in a year and a half, ending a series of increases that had lasted since December 2023.
Despite the drop, ground coffee still accumulates inflation of 76.5% over 12 months. Experts point out that the advancement of the Brazilian harvest may keep prices on a downward trajectory in the coming months.
Coffee Starts to Get Cheaper in the Supermarket
The survey by IBGE showed that the coffee price retracted for the first time in 18 months. The drop was recorded in the preliminary data of the official inflation measured by the IPCA-15, which considers prices between the 16th of the previous month and the 15th of the month of publication.
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According to the Brazilian Coffee Industry Association (Abic), the average price of traditional coffee reached R$ 66.70 in June. In the same period last year, the price was R$ 35.17, which means it almost doubled in a year. Nevertheless, the latest data indicates a shift in market behavior.
Expectation Is of New Drops in the Coming Months
Economists interviewed by the G1 portal in June had already anticipated the drop in the coffee price, due to the harvest occurring between March and September in Brazil. The months of June and July concentrate the highest volume, which tends to increase supply and pressure prices downwards.
In addition, Fipe had already pointed out a decrease in coffee prices in its inflation index (IPC) in the week prior to the IBGE survey, reinforcing the trend towards relief for consumers.
Uncertainties in the External Market Also Impact
Another factor that may influence the coffee price is the trade policy of the United States. A tariff of 50% on Brazilian products is set to take effect on August 1, unless an agreement is reached between the countries. The U.S. is the main destination for coffee exported by Brazil, accounting for 16% of external sales.
According to the Coffee Exporters Council (Cecafé), even with the risk of the tariff, other markets such as China, India, Indonesia, and Australia may increase their demand for Brazilian coffee, helping to balance the sector.
Have you noticed a drop in the price of coffee where you live? Share your experience in the comments.
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