Brazilian Coffee Monthly Update: May 2023

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

• Brazil exported 2.7m bags in April 2023, a drop of 12% MOM and 10% YOY. In January to April 2023, Brazil shipped only 11.1m bags, 20% lower when compared to the same period in 2022. Despite the low exports, recent weeks have seen an increase in coffee sales by producers. Furthermore, with the start of the Brazilian 2023/24 harvest, exporters are beginning to increase their interest in new purchases.

• In May 2023, the spot barter ratio reached 2.2 bags/metric ton. Despite the 4% MOM deterioration, the barter ratio remains very favorable for coffee growers, especially when compared to May 2022, when the index reached 4 bags/metric ton of fertilizer. In recent weeks, potash and phosphate (MAP) prices continued declining, which helped maintain the barter ratio levels.

• In April 2023, local arabica coffee prices averaged BRL 1,106/bag (60kg), 12% lower YOY. However, given the current lower arabica coffee availability (as we can see in exports), coffee prices gained 10% in 2023, year-to-date. In May 2023, coffee prices declined 4.4% MOM. In addition to the increase in coffee sales by producers, the start of the next Brazilian harvest is also weighing on prices.

• Rainfall in April was above average in all but one arabica region (Manhuaçu, Minas Gerais). Weather has been good and helped the final cherry-filling stage for arabica varieties. Despite the recent rains, the harvest gained traction in robusta regions. Meanwhile, the arabica harvest should only accelerate in the coming weeks. From now on, lower rainfall should help the harvest progress and support good cup quality. Rabobank forecasts the 2023/24 Brazilian crop at 66m bags, 4.4% higher than in 2022/23.

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