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World Coffee Production Set to Increase by 4% in 2022/23

May, 15, 2023 Posted by Lucas Lorimer

Week 202323

The United States Department of Agriculture projects that world coffee production for the 2022/23 harvest will be 171.75 million 60-kg bags, up 4% over the previous cycle. This is important to rebuild stocks, but it will not be enough to fully compensate for the losses between the 2020/21 and 2021/22 harvests when global production fell by more than 10 million bags.

“Stocks are at low levels due to production limitations in Brazil, as a result of the drought caused by La Niña, and in other countries such as Colombia and Vietnam,” says Wellington Teixeira, Superintendent of Market Studies and Supply Management at the National Supply Company (Conab).

Added to this scenario in Brazil, according to Teixeira, is the abandonment of the policy to build public stocks in recent years, which causes the government’s reserves to be zeroed. “Even so, the outlook is for good prices throughout 2023, with quotations being sustained by the market’s bullish factors,” says Teixeira.

As the largest coffee producer in the world, Brazil exported 8.6 million 60-kg bags in the first quarter of 2023, 21.7% less than in the same period of 2022, with the United States (18.7%), Germany (15.1%), Italy (7.8%), Belgium (5.7%), and Japan (4.9%) as the main destinations. “The prospect is for a recovery in exports in the second half of the year, with the growth in production this year,” says Teixeira.

Coffee exports from Brazil | Jan 2019 – Mar 2023 | WTMT

Source: DataLiner (click here to request a demo)

According to Conab’s first harvest bulletin, released in January, the estimate is that Brazil will produce about 54.9 million 60-kg bags, which represents a 7.9% increase compared to last season.

“The coffee market is very challenging,” says Luiz Fernando dos Reis, commercial superintendent of Cooxupé, a cooperative from Minas Gerais that produces Arabica coffee. “When we look at the New York Stock Exchange, which trades Arabica coffees worldwide, we see that future prices are below the current expiration date. This causes the volume of business to be reduced and characterized by short-term purchases,” explains Reis.

In 2022, Brazil exported to 145 countries and was expected to increase its participation in the next harvests, with the possibility of opening new markets for differentiated products, as well as the expansion of participation in countries that already import the Brazilian product. In Asia, China stands out with a good potential for growth in the consumption of the beverage.

Source: Valor Econômico

To read the full original article, access: https://valor.globo.com/publicacoes/especiais/agronegocio/noticia/2023/05/15/mercado-espera-retomada-na-producao-mundial-de-cafe.ghtml

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