The United States Department of Agriculture’s Foreign Agricultural Service recently released its World Markets and Trade report, providing valuable insights into the coffee industry. According to the report, world coffee production for the 2023/24 period is projected to increase by 2.5% compared to the previous year, reaching a total of 174.3 million bags (60 kilograms each).
The rise in production is primarily attributed to higher output in Brazil and Vietnam, which is expected to offset the reduced production in Indonesia. This increase in supplies is anticipated to drive global coffee exports up by 5.8 million bags, setting a new record at 122.2 million bags. Brazil’s robust shipments play a significant role in this growth. Meanwhile, global consumption is forecasted to reach a record high of 170.2 million bags, resulting in tight ending inventories of 31.8 million bags.
Brazil, one of the largest coffee producers, is predicted to experience a combined Arabica and Robusta harvest increase of 3.8 million bags, reaching 66.4 million bags for the 2023/24 period. The output of Arabica coffee is expected to improve by 4.9 million bags, reaching 44.7 million bags. Adverse weather conditions challenged coffee growers in Minas Gerais, Brazil’s top growing region, during the fruit development stage. However, increased precipitation resulted in the production of coarser and heavier beans, contributing to overall production gains.
In contrast, the Robusta harvest in Brazil is projected to decline by 1.1 million bags to 21.7 million bags due to reduced rainfall and cooler temperatures affecting yields in Espirito Santo, where most of Brazil’s Robusta coffee is grown. Nonetheless, higher supplies and an expected stocks drawdown are expected to lead to an 8.0 million bag rebound in coffee bean exports from Brazil, reaching 41.0 million bags.
Vietnam, another major coffee producer, is predicted to experience a production rebound of 1.6 million bags, totaling 31.3 million bags, thanks to favorable weather conditions. The majority of Vietnam’s coffee production, approximately 95%, consists of Robusta beans. While bean exports are anticipated to decline slightly by 1.5 million bags to 24.5 million bags, the output gains are expected to boost ending stocks to 2.7 million bags.
In Central America and Mexico, coffee production is forecasted to remain stable at 17.9 million bags, with Arabica accounting for 95% of the total output. Modest gains in Honduras, El Salvador, and Costa Rica are predicted to offset a slight dip in Guatemala. The region’s bean exports are expected to remain nearly flat at 14.7 million bags, with consistent shipments to top markets.
Colombia’s Arabica production is forecasted to increase by 300,000 bags to 11.6 million bags due to slightly higher yields. However, yields still remain nearly 15% below normal levels due to limited fertilizer use. Bean exports from Colombia are expected to rise by just 100,000 bags to 10.9 million bags, as supplies remain tight.
On the other hand, Indonesia’s combined Arabica and Robusta harvest is projected to decrease by 2.2 million bags to 9.7 million bags. Excessive rainfall during cherry development led to lower yields and unfavorable pollination conditions in lowland areas of Southern Sumatra and Java, where approximately 75% of Indonesia’s coffee is grown. Consequently, bean exports are forecasted to plummet by 2.5 million bags to 5.2 million bags due to reduced supplies.
Other countries, such as Ethiopia and India, are also experiencing fluctuations in their coffee production. Ethiopia’s Arabica production is predicted to remain nearly flat at 8.4 million bags, while India’s combined Arabica and Robusta harvest is projected to decline to 5.8 million bags.
Regarding global trade, the European Union is expected to increase coffee bean imports by 3.0 million bags to 47.5 million bags, accounting for 40% of the world’s total imports. The United States, the second-largest importer, is forecasted to gain 2.5 million bags, reaching 26.5 million bags. Brazil, Colombia, and Vietnam are the leading coffee suppliers to these markets.
In summary, the USDA’s report provides valuable insights into the world coffee market for the upcoming 2023/24 period. With increased production in Brazil and Vietnam compensating for reduced output in Indonesia, the global coffee industry is poised for growth. However, challenges such as weather conditions and limited fertilizer use in certain regions may impact yields and supplies. It will be interesting to monitor how these factors shape the coffee market and trade in the coming months.
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