CoffeeNetwork (New York) – According to the latest USDA attache, The Agricultural Trade Office (ATO)/Sao Paulo has revised downward the estimate for the Brazilian coffee production for marketing year (MY) 2022/23 (July June) to 62.6 million bags (60 kilograms per bag), green equivalent, a decrease of 1.7 million bags relative to the previous estimate. However, the estimate is still up by 4.5 million bags compared to the last crop.
Arabica production has been revised downward to 39.8 million bags, down 1.7 million bags vis-à-vis the previous estimate. Weather-related issues such as below-average rainfall until September 2021, frosts during June/July 2021, and overall warmer-than-normal weather as of March/April 2022 associated with low rainfall volumes during the winter months have jeopardized the expected initial production outcome for the current crop, especially in the southeastern states. The Robusta/Conilon production estimate remains unchanged at 2.2 million bags. The table below shows coffee production by state and variety from MY 2017/18 to MY 2021/22.
ATO/Sao Paulo estimates the total area planted for coffee for MY 2022/23 unchanged from the previous estimate at 2.50 million hectares. The coffee tree inventory is estimated at 7.61 billion trees, also unchanged from the previous figure. The Brazilian coffee yield estimate for MY 2022/23 has been revised downward from 31.83 to 30.99 bags/ha due to the lower outcome for Arabica production. The graph below illustrates the evolution of Brazilian coffee yields since the 2001/02 crop.
of the Ministry of Agriculture, Livestock and Supply (MAPA), released the third official coffee production estimate for MY 2022/23. According to the third survey, coffee production is estimated at 50.38 million bags (32.41 million bags for Arabica and 17.97 million for Robusta coffee), an increase of 5 percent compared to MY 2021/22 (47.73 million bags). CONAB has been working on the review of the methodology to forecast coffee production since mid 2020.
The September 2022 coffee production estimate for MY 2022/23 released by the Brazilian Institute of Geography and Statistics (IBGE) shows the production of 3.135 million metric tons of coffee, or 52.22 million 60 kg bags (33.82 million bags for Arabica and 18.43 million for Robusta coffee), an increase of 3.25 million bags compared to MY 2021/22 (49 million bags). Both CONAB and IBGE use a different methodology to forecast coffee production than ATO/Sao paulo. Both are consistently lower than post’s estimates. No Brazilian official forecast has been announced for the MY 2023/24 coffee production.
Coffee Prices in the Domestic Market
Prices have remained steadily strong both in Brazilian Reals and in U.S. Dollar during the harvest season, given that the tight world supply demand remains.
According to the October 2022 coffee trade statistics released by the International Coffee Organization (ICO), the 3.1-million-bag world deficit in coffee supply persists. Worldwide coffee production for MY 2021/22 is expected to drop from 170.83 to 167.2 million bags. In contrast, total world coffee consumption for 2021/2022 is forecast to grow to 170.3 million bags, a three percent growth compared to the world consumption for 2020/21 (164.9 million bags).
Consumption
Brazil’s domestic coffee consumption for MY 2022/23 is estimated unchanged at 22.45 million coffee bags (21.5 million bags of roast/ground and 950,000 bags of soluble coffee, respectively), an increase of one percent compared to MY 2021/22 (22.34 million bags – 21.4 million bags of roast/ground and 940,000 bags of soluble coffee, respectively).
The graph below shows the evolution of ground/roast coffee retail prices in Sao Paulo, the largest Brazilian city, as reported by Foundation PROCON for 2021 and 2022. Roast/ground coffee prices have increased significantly since 2021 due to the high costs to acquire green beans, high costs of energy, among other operational costs. Roast/Ground coffee prices in August 2022 are R$ 15.35/500 grams, an increase of 64 percent compared to August 2021 (R9.36/500 grams).
Trade
Brazil remains competitive globally, supported by the highly depreciated local currency vis-à-vis the U.S. Dollar. Brazilian coffee exports for MY 2022/23 are estimated at 36.65 60-kg million bags, a drop of 2.4 million bags compared to the previous estimate to reflect current trade flow, continued logistical bottlenecks and updated information from the industry. Green bean (Arabica and Robusta/Conilon) exports for MY 2022/23 are estimated at 33million bags, whereas soluble coffee exports are estimated at 3.6 million bags. Major destinations for the current MY include the United States, Germany, Italy, and Belgium. Brazilian coffee exports for MY 2021/22 are estimated at 36.69 million bags, an increase of 1.69 million bags relative to the previous estimate based on updated industry data.
The United States, major destination for Brazilian green coffee, imported 431,691 metric tons (mt) of green coffee during MY 2021/22, a reduction of eight percent compared to the previous MY. Green coffee exports to Germany, second major destination for Brazilian green coffee, decreased by 21 percent in MY 2021/22 (385,275 mt) relative to MY 2020/21 (489,416 mt). Lower exports for MY 2021/22 are related to lower availability of exportable product due to lower production output in 2021/22.
CECAFE (Brazilian Coffee Exporters Council) and the Brazilian Soluble Coffee Association (ABICS) reported total coffee exports during the July-September 2022 period were 8.74 million bags, relatively similar to the same period for MY 2021/22 (8.98 million bags). Until November 8, preliminary data shows that coffee export registrations for November 2022 were 832,043 bags, while cumulative green coffee export shipments for November 2021 were 504,163 bags. The tables below include data on monthly coffee exports (quantity and value) for MY 2021/22 (July-June) and MY 2022/23 (July-September), as reported by CECAFE and ABICS.
Stocks
ATO/Sao Paulo estimates carry-over stocks for MY 2022/23 at 4.12 million bags, an increase of 3.58 million bags vis-a-vis the previous season, because of the expected larger supply. CONAB has not yet released the 2021 and 2022 private stocks survey, including stocks held by growers, coffee cooperatives, exporters, roasters, and the soluble industry. CONAB has worked on reviewing the current methodology to estimate stocks. Government-owned stocks held by CONAB were virtually zero.