Brazilian coffee monthly update: July 2024
Read about exports, prices, weather, stocks, and crops in our latest update about the Brazilian coffee industry.
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Highlights
- In June, Brazil exported 3.6m bags of coffee, a 36% increase from June 2023 despite a 19% decrease from the previous month. This led to a record of 47.3m bags exported in the 2023/24 crop year (July-June), a 33% increase from the previous cycle.
- During 2023/24, Brazil’s exports of arabica coffee saw a rise of 17% from the previous cycle, amounting to 35.4m bags. Meanwhile, canephora coffee (conilon and robusta) exports surged by 461%, totaling 8.2m bags, due to supply constraints in Vietnam and Indonesia.
- According to the Cecafé report, Brazil still faces intense logistical challenges, with issues overseas due to ongoing geopolitical conflicts, and domestically, due to the saturation of the main Brazilian port, in Santos (SP).
- The barter ratio improved through July 2024, requiring 1.7 coffee bags (60 kg) to purchase one metric ton of fertilizer (blend 20-05-20). Despite slightly higher fertilizer prices, the sharp increase in coffee prices has significantly favored the barter ratio, marking the lowest barter ratio of the past decade. For the coming weeks, urea is projected to continue its price appreciation trend, while potash may face pressures.
- Coffee prices remained high in Brazil. In June, arabica was BRL 1,349/bag, a 45% YOY increase, and conilon was BRL 1,214/bag, a 72% YOY increase. Coffee prices continued to rise in July.
- Concerns about the supply of robusta coffee, particularly in Vietnam, global logistical bottlenecks due to ongoing conflicts in the Red Sea, and a potential reduction in the 2024/25 Brazilian crop have all contributed to market volatility. Furthermore, non-commercial funds maintain large net long positions in the coffee market, contributing to the volatility.
- Dry weather in June favored harvesting activities in major coffee regions for both arabica and conilon/robusta types.
- As we enter the second half of July, with reports showing no significant improvement in yields (outturn) or screen size (small grains), it seems appropriate to revise our crop estimate downward. Following these adjustments, the revised estimate for the 2024/25 Brazilian crop stands at 44.1m bags for arabica (down from 46.5m) and 23m bags for conilon (down from 23.3m). This totals 67.1m bags, compared to the previous estimate of 69.8m bags.
