Brazilian coffee monthly update: May 2024
Read about exports, prices, weather, stocks, and crops in our latest update about the Brazilian coffee industry.
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Highlights
- Brazilian exports remain excellent, despite the ongoing logistical challenges noted in the latest Cecafé report. In April, 4.2m bags (60 kg) were exported, representing a 53% YOY increase. Brazil has shipped a total of 16.2m bags in 2024, a 46% YOY rise.
- Conilon/robusta coffee exports remain strong, with 677,000 bags shipped in April. The total for 2024 stands at 2.6m bags, a remarkable 548% increase compared to 2023. Arabica coffee is also performing well, with 12.5m bags exported in the first four months of 2024, a growth of 31% YOY.
- If the logistical situation does not worsen, export volumes should remain strong due to the good 2023 harvest and the upcoming 2024 harvest gaining traction in the coming weeks.
- Despite a slight decline in the barter ratio in recent weeks (9% MOM), the overall situation remains favorable. Currently, approximately two coffee bags are needed to purchase one metric ton of fertilizer (blend 20-05-20), which is 12% cheaper year-on-year. While coffee prices have decreased recently, impacting the barter ratio, fertilizer prices remain stable.
- In April, Brazilian coffee prices experienced significant appreciation. The average price for arabica coffee reached BRL 1,214/bag (60 kg), a 17% MOM increase. Meanwhile, conilon coffee reached record levels above BRL 1,000/bag, showing a 23% MOM increase and a remarkable 65% YOY surge. Uncertainties surrounding robusta coffee supply, mainly due to dry weather in Vietnam (the world’s largest robusta producer), attracted non-commercial funds to the coffee market, driving up international prices. As rains began and optimistic weather forecasts emerged for Vietnam, the coffee market calmed down in May. During May, Brazilian coffee prices depreciated by an average of 8% and 13% for arabica and conilon, respectively. In the short term, all these factors should contribute to price volatility. However, the start of the Brazilian harvest may limit prices.
- All arabica coffee regions received below-average rainfall in April, though that should not affect yields. It’s worth noting that the harvest is slightly earlier. In the arabica region, harvest is more advanced in Zona da Mata Mineira than in other areas, and the overall harvest is expected to gain traction in the coming weeks. In the conilon region, the harvest is in full swing. Preliminary reports indicate a drop in yields, but this is normal for the first coffee samples. The drier weather should favor harvest progress and coffee quality in the coming months.
