Brazilian Coffee Monthly Update: February 2023

Our latest update about the Brazilian coffee industry. Read about exports, prices, weather, stocks, and crops.

• Brazil exported 2.8m bags in January 2023, a drop of 12.2% MOM and 16.8% YOY. A slowdown in coffee exports was expected in 1H 2023. In addition to smaller harvests in the last two seasons, coffee growers who still own coffee tend to postpone their sales in the expectation of better prices. The local industry’s increasing demand, especially for Brazilian conilon, also contributed to the lower shipments.

• In February 2023, the spot barter ratio reached 2.3 bags/metric ton – an improvement of 12% MOM and 6% YOY. It is the lowest barter ratio since December 2020. In addition to the recent recovery of coffee prices, fertilizer prices, mainly urea, continue to decline.

• In February 2023, local arabica coffee prices averaged BRL 1,126/bag (60kg), down 24% YOY but up 11.6% YOY. The current lower coffee availability and the declining outlook for the coming Brazilian crop are the main factors for the price recovery.

• Despite the decline, rainfall in February was above the historical average in most coffee-producing regions. Even with the excellent weather patterns, arabica production will likely be limited due to the high rate of fruit abortion – the long dry period in 2022 and high temperatures during flowering impaired fruit set. At the moment, Rabobank forecasts the 2023/24 crop at 67.1m bags, of which 44m bags will be arabica (far from the 2020 record). It represents a slight increase of 6% in total output compared to the last cycle.

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