Coffee Prices Drop Sharply After Widespread Frosts in Brazil, Northern Latitudes Including, Sao Paulo Region Freezing, too
Marek Kučera 
In a market reaction, global coffee prices dropped sharply this week, as widespread frost events swept across Brazil’s key growing regions, including higher-latitude areas and the traditionally milder São Paulo region, where freezing temperatures were reported.
About extreme frosts in Brazil, we wrote here: https://mkweather.com/historic-cold-wave-sweeps-brazil-june-2326-2025-with-8-0c-sao-joaquim-60c-and-frozen-fountains-only-1-2c-from-all-time-june-record/.
🧊Frost Hits Brazilian Coffee Belt — Including São Paulo
A series of unusually strong cold spells plunged overnight temperatures below freezing across parts of Minas Gerais, Paraná, and even São Paulo state, areas crucial to the global arabica coffee supply. While early assessments suggest some damage to leaves and young plants, no catastrophic crop loss has been reported yet.
The frost, which occurred unusually early in the season and at northern latitudes less accustomed to freezes, raised alarms across global commodity markets. However, the actual impact on coffee plants remains under review, and damage appears patchy rather than widespread.
📉Prices Drop Unexpectedly
Despite initial fears of crop damage, coffee futures tumbled, driven by:
- Profit-taking by investors after a sharp rise earlier in June
- Speculation that the frost damage may be superficial
- Improved rainfall outlooks and stable reserves in some producing regions
- Technical market factors triggering automated selloffs
As a result, coffee prices at the ICE exchange in New York fell sharply, surprising many traders who expected the cold snap to send prices upward.
🌍Global Market Cautious But Not Panicked
Coffee traders and analysts are now taking a wait-and-see approach. If follow-up assessments reveal significant long-term damage to flowering or developing cherries, prices may rebound quickly. However, with recent high prices and relatively strong inventories, the market is balancing potential production losses against short-term demand trends.
⚠️Climatic Warning Signs for Brazil
The frost serves as another warning about the increasing volatility of Brazil’s climate, where sudden cold snaps, shifting rainfall patterns, and hotter summers are disrupting agricultural cycles. The fact that São Paulo — typically frost-free — experienced freezing temperatures adds to concerns about climate unpredictability in Brazil’s main coffee belt.
☕What’s Next?
With the Brazilian winter just beginning, analysts are watching for:
- More frost events in July and August
- Field-level damage reports from cooperatives and growers
- Shifts in global supply chain and export volumes
For now, the market has reacted coolly to the freeze — but if further cold spells strike or losses are larger than anticipated, a sharp rebound in prices remains a real possibility.
Source: INMET
