Coffee Weekly Report

On the Brazilian domestic market, Arabica and Robusta coffee prices followed the trend abroad and ended the week higher, albeit to a lesser extent. The Cepea indicator for Arabica coffee rose 5.1% on the week to BRL 1,460.32/bag. The indicator for Robusta coffee was also up, rising 4.6% to BRL 1,292.34/bag. The less intense increase in the domestic market can be explained by the dollar's fall during the week.  

From the point of view of fundamentals, the scenario remains practically unchanged, with the market supported by the reduced supply of Robusta coffee in Asia and concerns about the yield of the 2024/25 crop in Brazil. As presented in other editions of this report, the tight supply of Robusta in Asia is unlikely to ease in the short term, given that the harvest of the 2024/25 crop in Vietnam, the world's largest Robusta producer, will only begin in mid-November, with the coffee actually arriving on the market in mid-December.  

Regarding Brazil, as has already been covered in other editions of this report, the yield of the Brazilian coffee crop, which is currently 73% harvested, is lower than expected, which indicates a shorter supply than expected in Brazil. It is therefore possible that the organizations will adjust their estimates for the Brazilian crop downwards. In addition, the quality of the crop is lower, with a poorer appearance and sieve. Average projections for the Brazilian coffee crop point to an increase of 6% to 68 million bags, with the USDA projecting a crop of 69.9 million bags and other institutions betting on an even higher figure, above 70 million bags. StoneX, after conducting a crop survey in the producing regions of Brazil, projected a 4.2% increase in the Brazilian crop to 67 million bags.   

In the coming weeks, in addition to monitoring the aspects mentioned above, the focus of market participants will be on the weather. While adequate weather is essential for the development of the crop in Vietnam, in Brazil, the return of the rains in the coming months is necessary to ensure the proper opening of the flowering stage in the country. In this regard, the possibility of a return of La Niña will be closely monitored. However, the latest updates from the US agency NOAA indicate that the phenomenon will only begin in October/November/December and will be of low intensity, which would not be capable of causing severe damage to the flowering season. However, it is essential to monitor this scenario closely, given the uncertainty linked to weather forecasts. 

Brazil sets new record for coffee exports in 2023/24 

Last week, the Brazilian Coffee Exporters Council (Cecafé) released the figures for coffee exports in June and provided an overview of coffee exports in the 2023/24 crop year (July/23-June/24). In June, Brazil exported a total of 3.297 million bags, a volume which, despite being down 18% from the previous month, represented an increase of almost 44% compared to June last year. 

Once again, Robusta coffee was the highlight. Robusta exports totaled 817,000 bags, an increase of 254% compared to the same month in 2023, while Arabica shipments grew 20% year-on-year to almost 2.5 million. This brings us to the consolidated export figures for the 2023/24 season. The sum of Arabica, Robusta, soluble coffee and roasted coffee exports totaled 47.3 million bags, an increase of 32.7% compared to last year, when it was 35.6 million, and even surpassing exports from the record crop of 2020/21, when shipments totaled 45.7 million bags. 

Brazilian coffee exports (million bags) 

Source: Cecafé. Design: StoneX. 

The higher volume was due both to a crop with good volume and to the high competitiveness of Robusta coffee. While Arabica recorded an increase of 16.7% compared to the previous crop year, totaling more than 35 million bags, Robusta coffee went from less than 1.5 million bags in the previous season to 8.2 million in the crop that just ended, an increase of 461%. Robusta coffee's share of exports has never been higher. By way of comparison, in the previous two seasons, Robusta accounted for 6.7% and 4.1% respectively of all Brazil's exports, while in 2023/24 it accounted for 17.4% of shipments. 

Export revenue also grew and renewed its historic high in 2023/24. Revenues from Brazilian coffee exports totaled USD 9.8 billion this season, representing an increase of 20.7% compared to the previous season. The highest revenue came from Arabica coffee exports, which advanced 7% to 7.6 billion dollars. However, the biggest increase came in revenues from Robusta coffee exports, which rose by almost 536% to almost USD 1.4 billion. Revenues from processed coffee exports rose by just 0.7% to USD 767.9 million, with soluble coffee accounting for 97% of this amount.  

Volume (millions of bags) and revenue (billions of dollars) of Brazilian coffee exports  

Source: Cecafé. Design: StoneX.

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