Brazilian Coffee Monthly Update: November 2023

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

- Recently, logistical issues, including container shortages, shipping delays, and port congestion, have posed challenges for coffee exports. Looking ahead, increased white sugar exports, rainfall in the south and southeast, and cargo redirection to the Santos port could remain challenges for coffee exports.

- Despite these obstacles, October saw excellent export figures for arabica and robusta coffee. In October 2023, Brazil exported 4.4m coffee bags (60kg), an increase of 30% MOM and 22% YOY.

- Notably, Brazilian conilon exports surged by 144% between January and October 2023 compared to the previous year, reaching 3.3m bags (60kg).

- Considering the 2023 harvest and the positive outlook for 2024, Brazilian coffee exports are expected to grow in the coming months. Rabobank forecasts coffee exports between 40m and 42m bags in 2023/24 (July-June).

- The barter ratio in November showed improvement, requiring 2.6 bags (60kg) of coffee to purchase 1 metric ton of fertilizer (blend 20-05-20), down 11% MOM and 25% lower than November 2022 (when 3.4 bags of coffee were needed to buy 1 metric ton of fertilizer). This improvement is primarily attributed to the recent rise in coffee prices rather than changes in fertilizer costs.

- Arabica coffee prices increased by 2.3% in October and continued to rise in November by 6%, averaging BRL 877 per 60kg bag. In addition to concerns about the intense heat in the current month, the low certified stock in New York (the lowest in the last 24 years) and congestion at the Santos port contributed to this price hike.

- Most coffee-producing regions experienced above-average rainfall in October, except for Espírito Santo state, likely influenced by El Niño. Despite lower rainfall, the arabica-producing area maintains a reasonable cumulative total. In the conilon region, October rainfall fell below historical averages, but effective water management lessened the impact. November started with promising rainfall in the main arabica coffee regions. However, the past 10 days have been drier and hotter, factors that bring some concern to production.

- So far, we believe that the 2024/25 harvest may exceed 2023/24 results (estimated at 66m bags), potentially bringing some price devaluing throughout 2024.

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