Brazilian Coffee Monthly Update: August 2024

In July, Brazil exported 3.7m bags (60kg), a 26% increase compared to the same period in 2023. This brings the total exports for 2024 (January to July) to 28.1m bags, a 46% rise YOY.

Arabica coffee exports have also seen significant growth, increasing by 31% YOY in 2024 to reach 20.7m bags. Brazilian conilon exports continue to surge, with 5.2m bags exported this year, a remarkable 314% increase compared to 2023. This growth is driven by supply constraints in Vietnam and Indonesia.

With the EU Regulation on deforestation-free products (EUDR) set to take effect on January 1, 2025, Brazil’s coffee exports to the EU have risen by 64.9% in 2024, totaling 13.3m bags. The EU now accounts for 47.3% of Brazil’s coffee exports.

The barter ratio has remained relatively stable compared to last month, with 1.7 bags of coffee (60kg) needed to purchase a metric ton of fertilizer (blend 20-05-20). This is a significant improvement from last year, when 2.9 bags were required for the same amount of fertilizer. With coffee prices remaining high and the fertilizer market showing little change, the barter ratio is expected to stay favorable for producers in the coming weeks.

In July, coffee prices in Brazil remained elevated. Arabica averaged BRL 1,420/bag (60kg), while conilon was at BRL 1,270/bag, both reflecting a 5% increase from the previous month. As of August, prices continue to stay high, driven by uncertainties in robusta coffee supply, weather conditions in Brazil, and significant participation of non-commercial funds in New York.

July was dry in Brazil’s main coffee-producing regions, and August has continued this trend in the primary arabica-producing areas. The dry weather has been beneficial for the quality of the beans and the pace of the harvest, which is nearly complete.

In August, a cold front passed through the coffee regions in Paraná, São Paulo, and the south and west of Minas Gerais. Isolated frost was reported, causing limited losses, primarily in low-lying areas. While significant damage from the frost is not anticipated, the persistent dry weather in the arabica coffee regions is raising concerns about the productive potential of the next crop, especially if the rains are delayed.

RaboResearch has revised the 2024/25 crop forecast from 69.8m bags (60kg) to 67.1m bags due to lower outturn and smaller screen size.