Brazilian Coffee Monthly Update: June 2023

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

• Brazil exported 2.4m bags in May 2023, a drop of 11% MOM and 17% YOY. From January to May 2023 Brazil shipped 13.6m bags, 19% lower when compared to the same period in 2022. As expected, exports remain slow due to the current lower coffee inventories. An improvement in shipments is expected from July onward as the new 2023/24 Brazilian crop starts to be processed.

• In June 2023, the spot barter ratio reached 2.0 coffee bags (60kg) per metric ton of fertilizer, a drop of 9% MOM and 39% YOY. This is the lowest barter ratio since February 2018, meaning it is an excellent moment for farmers to purchase fertilizer. Despite the recent decrease in local arabica prices, fertilizer prices continued declining, especially potash (KCl).

• In June 2023, local arabica coffee prices declined by 5% MOM, averaging BRL 990/bag (60kg). Meanwhile, conilon prices increased by 6% MOM, averaging BRL 715/bag. Despite lower arabica coffee stocks, the 2023/24 Brazilian harvest started to weigh on arabica coffee prices. At the same time, in addition to the higher local robusta demand, Brazilian conilon reaching differentials close to Vietnam and increased international prices (ICE London) began to impact the domestic robusta market.

• As expected, the rains decreased in May, with the winter season incoming. However, 2023/24 cumulative rainfall remains above the historical average in all but two coffee-producing regions. The harvest continues to progress at a good pace. According to CEPEA/ESALQ, the robusta harvest reached 22% in Espírito Santo state (the largest robusta-producing region) and 60% in Rondônia. According to Cooxupé, the arabica harvest reached 17%, a bit advanced compared to the previous cycle. From now on, lower rainfall should help the harvest progress and ensure good cup quality. Rabobank forecasts the 2023/24 Brazilian crop at 66m bags, 4.4% higher than 2022/23.

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