2022/23 Brazilian Coffee Mid-Season Review

Published 2023년 1월 11일

Coffee growers in Brazil, the leading coffee producer, expect a recovery in coffee output this 2022/23 season from the four-year low of 58.1 million bags harvested last season. Of the 62.6 estimated for the 2022/23 crop year, arabica production could rise by 3.4 million bags to 39.8 million bags, while Robusta output is set to reach 22.8 million bags. This improved production is expected to propel Brazilian coffee exports this season. During the first semester of 2022/23 MY, coffee shipments performed well, totaling 16.05 million bags, 270K bags more than the previous marketing year. Current quotations of the CEPEA/ESALQ Index for arabica coffee type 6, delivered to São Paulo, are at BRL 944.56 per bag, having peaked at BRL 1,555 (USD 298) per bag in February, the highest in over 26 years.

Coffee growers in Brazil, the leading coffee producer, expect a recovery in coffee output this 2022/23 season from the four-year low of 58.1 million bags harvested last season. Historically, Brazilian climatic patterns have supported a biannual boost in coffee production, which led industry experts to initially predict a higher rise in this season's crop at 64.5 million 60-kilo bags, an increase of 11% compared to the 2021-22 crop. However, a few coffee-growing regions in the country experienced unfavourable weather conditions, limiting the production growth to 7.8% to 62.6 million bags for the 2022/23 crop. Of the 62.6 estimated for the 2022/23 crop year, arabica production could rise by 3.4 million bags to 39.8 million bags, while Robusta output is set to reach 22.8 million bags. According to Companhia Nacional de Abastecimento (Conab), harvesting is proceeding as expected, with production for the current season reaching 50.9 million bags in December.

Source: USDA

This improved production is expected to propel Brazilian coffee exports this season. During the first semester of 2022/23 MY, coffee shipments performed well, totaling 16.05 million bags, 270K bags more than the previous marketing year. Demand for green coffee beans remained strong, pushing Brazilian suppliers to ship 14.5 million bags, a 3.4% YoY increase. According to Hedgepoint, a leading risk management, and intelligence firm, dwindling domestic consumption propelled Arabica exports to 13.9 million bags, an increase of 12% compared to the previous year. Rising inflation has turned Brazilian consumers away from highly-priced Arabica beans towards the more affordable Robusta variety. This trend has caused robusta shipments to shrink by 62% to 636,000 bags.

The quotations for Brazilian arabica coffee remained well above BRL 1,000 per bag during the first semester of this season due to the impact of the Russia-Ukraine war, which intensified the logistical woes that had plagued global markets since the onset of the COVID-19 pandemic. Current quotations of the CEPEA/ESALQ Index for arabica coffee type 6, delivered to São Paulo, are at BRL 944.56 per bag, having peaked at BRL 1,555 (USD 298) per bag in February, the highest in over 26 years. As a result of higher demand from Brazilian coffee roasters, Robusta prices were elevated throughout the season. The highest monthly average for the CEPEA/ESALQ Index (Espírito Santo) for robusta coffee type 6 in 2022 was BRL 828.16/bag, the third highest ever recorded.