Arabica Coffee Prices Fall on a Jump in Brazil’s Coffee Exports

Coffee prices are mixed, with arabica falling to a 4-week low and robusta coffee rising to a record high. Brazil’s Dec coffee exports (not roasted) jumped 33.7% YoY to 244 MMT, while robusta coffee supplies are bullish for prices. Vietnam’s General Department of Customs reported a -9.6% YoY drop in 2023 coffee exports to 1.60 MMT, and the Vietnam Coffee Association projected a fall in 2023/24 coffee production to 1.6 MMT-1.7 MMT.

Global coffee supplies are negative for prices, as the International Coffee Organization reported a 4.1% YoY increase in November global coffee exports to 10.61 million bags and an Oct-Nov increase to 20.25 million bags. Low coffee inventories support prices, with ICE-monitored arabica coffee inventories falling to a 24-year low of 224,066 bags on November 30 and 3,440 lots at 3,374 lots on August 31.

Recent dry weather in Brazil is expected to damage coffee crops, with the Minas Gerais region receiving only 42.4 mm of rainfall in the past week, which accounts for about 30% of Brazil’s arabica crop. The U.S. Climate Prediction Center declared an El Nino weather event on June 8, which is likely to support coffee prices. An El Nino pattern typically brings heavy rains to Brazil and drought to India, negatively impacting coffee crop production.

The International Coffee Organization projected that 2023/24 global coffee production would climb 5.8% YoY to 178 million bags due to an exceptional off-biennial crop year, and global coffee consumption will rise 2.2% YoY to 177 million bags, resulting in a 1 million bag coffee surplus. The USDA’s Foreign Agriculture Service (FAS) projected world coffee production in 2023/24 to increase +4.2% YoY to 171.4 million bags, with a 10.7% increase in arabica production to 97.3 million bags and a -3.3% decline in robusta production to 74.1 million bags.

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