Brazilian Coffee Monthly Update: May 2022

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

• Brazil exported 2.8m bags in April 2022, a drop of 26% MOM and 24% YOY. In addition to the ongoing logistical problems, higher demand for robusta from the local industry and lower coffee availability in between crops limited Brazilian exports. Despite the recent improvement in the logistical outlook, the current situations in eastern Europe (Russia-Ukraine war) and China (lockdowns due to increased Covid cases) bring concerns about the coffee supply chain.

• At the beginning of May 2022, the spot barter ratio reached 4.0 bags/metric ton, a decrease of 45% YOY but an improvement of 4.6% MOM. The recent decline in urea prices had a positive impact on the index. However, the barter ratio remains close to the highest historical levels.

• In April 2022, local coffee prices averaged BRL 1,251/bag (60kg), 2.6% lower MOM but 68% higher YOY. In May 2022, coffee prices are averaging BRL 1,256/bag.

• April rainfall was below average in most coffee-producing regions. However, cumulative rainfall for the crop remains above or close to the historical average across the coffee belt. The drier weather should favor harvesting activities, which should accelerate at the end of May. Rabobank projects the 2022/23 crop at 64.5m bags, of which 41.4m bags are arabica – a 22% decline compared to the last on-cycle crop (2020).

• According to the Brazilian National Institute of Meteorology (INMET), on May 16, a cold front should reach the South, Center-West, and Southeast regions in Brazil. If the trend continues through May 23, there may be favorable conditions for frost in the South region and isolated points in the Southeast region. It will be important to monitor the situation in the coming days.

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