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Brazilian coffee monthly update: October 2024

15 October 2024 16:31 RaboResearch

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

Rabobank

    In September, Brazil exported a record 4.5m bags (60kg) of coffee, marking the highest volume ever for that month. This brings the total exports for 2024 to 36.4m bags, a 39% increase compared to the same period last year. Despite this impressive performance, the Cecafé report highlights ongoing logistical challenges, including limited space at Brazilian ports and increased demand for containers, particularly for commodities like coffee, sugar, and cotton. These issues resulted in the country missing out on exporting 2m bags. Notably, exports of canephora coffee (conilon and robusta) have been exceptional in 2024. In September alone, 912,000 bags were shipped, bringing the total for the year to 7m bags – a 170% increase from the same period last year. In October, the barter ratio improved for producers, requiring 1.6 bags (60kg) of coffee to purchase 1 metric ton of fertilizer (blend 20-05-20). This represents a 3.5% decrease from last month and a 45% decrease from the same period last year. Despite a recent rise in urea prices, potash prices continued to fall, reaching their lowest level of the year, which helped balance fertilization costs. Additionally, high coffee prices have supported the barter ratio. In September, coffee prices in Brazil continued to rise. Arabica coffee averaged BRL 1,472 per bag (60kg), a 49% YOY increase. Conilon coffee averaged BRL 1,497 per bag, a 87% YOY increase, surpassing arabica prices – a phenomenon last seen in 2016 when the country experienced a conilon crop failure. In October, prices continue to fluctuate, with arabica prices recovering compared to conilon. The potential 12-month delay in implementing the EU Regulation on deforestation-free products (EUDR) to December 2025 and the onset of rains in Brazil have limited prices. Yet, concerns about conflicts in the Red Sea, upcoming Brazilian and Vietnamese harvests affected by climatic adversities, and tight global supply continue to support coffee prices. As a result of these price changes, local roasters are expected to significantly increase the use of arabica in their blends. September remained dry in the main coffee-producing regions. While robusta-producing areas received some rain, it was still below the historical average. Recent rains in key coffee regions are a positive sign, but continued rainfall is necessary to improve conditions. The prolonged dry weather and high temperatures raise concerns about the potential for the 2025/26 Brazilian crop. Looking ahead, more rain is forecast for coffee-growing areas, making it crucial to monitor weather patterns and crop responses.

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