1. Weekly News

Brazil

Brazil's Coffee Exports Surge in May-24

In May-24, Brazilian coffee exports surged to approximately 4.4 million 60-kg bags, marking a significant 79.6% YoY increase. For the first five months of 2024, total exports reached 20.7 million bags, showing a robust growth of 52% YoY. Particularly notable was the performance of Conilon/robusta coffee, which saw exports skyrocket to 868 thousand bags, a remarkable 559% YoY increase from 2023. These gains are attributed to a strong 2023 harvest and optimistic forecasts for the 2024 season, supported by favorable weather conditions in May-24 with below-average rainfall in coffee-producing regions, enhancing harvesting activities.

China

China's Coffee Imports and Exports Surged in Apr-24

According to the General Administration of Customs China (GACC), China's coffee imports surged in Apr-24, totaling 17.3 thousand metric tons (mt) valued at USD 71 million. This marks a substantial 28.87% year-on-year (YoY) increase in value and a 39.12% YoY increase in volume. From Jan-24 to Apr-24, cumulative coffee imports reached 110.4 thousand mt valued at USD 521 million, showing an impressive 87.84% YoY increase in value and a 143.15% YoY increase in volume. The top ten countries and regions supplying coffee to China include Brazil, Colombia, Vietnam, Malaysia, Ethiopia, the United States (US), Japan, Switzerland, Italy, and Indonesia, collectively accounting for 88.41% of total coffee imports.

In April 2024, China's coffee exports reached USD 29 million, marking an impressive 243.08% YoY increase. The export volume was 6.8 thousand mt, up by 232.65% YoY. From Jan-24 to Apr-24, the cumulative exports amounted to USD 71 million and 15.5 thousand mt, reflecting YoY increases of 79.43% and 66.13%, respectively. Vietnam emerged as the top destination, receiving coffee exports worth USD 9 million in the first four months of 2024, showing a remarkable increase of 504.71% YoY. In Apr-24 alone, exports to Vietnam surged to USD 5 million, marking an astounding 10,751.66% YoY increase. The top ten export markets include Hong Kong, the US, Germany, Malaysia, Japan, Russia, Saudi Arabia, the Netherlands, and Taiwan, collectively accounting for 73.4% of total exports.

Kenya

USDA Forecasts Declined Coffee Production in Kenya

The United States Department of Agriculture (USDA) projects Kenya'scoffee production to dip slightly to 750 thousand bags in the 2024/25 season, down from 800 thousand bags the previous year. The harvested area is anticipated to remain stable at 105 thousand hectares(ha). Exports are forecasted to decrease to 720 thousand bags, with imports expected to rise marginally to 20 thousand bags. Domestic consumption is predicted to show modest growth, reaching 58 thousand bags, while final stocks are expected to decline to 124 thousand bags.

Mozambique

Mozambique Aims to Elevate Role in Global Coffee Market

During the inaugural Coffee Festival in Maputo, Mozambique's Minister of Agriculture and Rural Development highlighted the country's potential to become a significant player in the international coffee market. The Minister emphasized the need for increased research and investment in coffee, with a focus on organic production to cater to growing global demand. Mozambique is also looking to position itself in the specialty and rare coffee segments and stresses the role of coffee cultivation in biodiversity conservation and rural livelihoods. Mozambique's membership in the International Coffee Organization in Jun-23 has attracted vital investments and technical assistance to further develop its coffee industry.

2. Weekly Pricing

Weekly Coffee Pricing Important Exporters (USD/kg)

Yearly Change in Coffee Pricing Important Exporters (W24 2023 to W24 2024)

Brazil

Brazil's coffee price decreased significantly by 9.75% week-on-week (WoW) to USD 6.02 per kilogram (kg) in W23 compared to USD 6.67/kg in W23. This decline is due to reduced trading activities. As of June 11, 2024, only 22% of the coffee has been sold, compared to 26% during the same period last year and a five-year average of 32%. Even with high prices, producers are careful and have sufficient capital from previous sales. Sales of Arabica coffee stand at 23%, lower than last year's 28% and the five-year average of 34%, while Conilon sales are at 20%, below last year's 24% and the five-year average of 29%.

Colombia

Colombia's coffee prices decreased by 3.26% WoW to USD 7.42/kg in W24. This decrease is due to lower local consumption caused by inflation, which has led Colombian families to spend more of their food budget on staple food instead of coffee. Additionally, climate crises have impacted the country's arabica production, resulting in significant coffee imports from Brazil. To increase local consumption, Colombia invests in online campaigns to educate consumers to value 100% Colombian coffee.

Vietnam

Coffee prices in Vietnam decreased by 1.45% WoW to USD 4.77/kg in W24. This decrease is in line with global trends, attributed to the beginning of the harvest season in Brazil. Vietnam experienced a substantial 47.8% month-on-month (MoM) decrease in coffee exports in May-24. Additionally, in the first five months of 2024, Vietnam exported 817.51 thousand mt of coffee, marking a 5.8% YoY decline. The market is slow, with some traders trading peppers over coffee.

3. Actionable Recommendations

Promoting Sustainable and Organic Coffee Production

Sustainable farming practices and organic production can cater to the growing global demand for environmentally friendly products. Mozambique's emphasis on organic coffee production is a step in the right direction. Other countries should follow suit by promoting sustainable agricultural practices, such as shade-grown coffee, agroforestry, and organic farming techniques. Certifications like Fair Trade and Rainforest Alliance can boost market appeal and command premium prices.

Investing in Research and Development

Continued investment in R&D is crucial for enhancing coffee yields, improving disease resistance, and developing specialty coffee varieties. Countries like Mozambique, focusing on entering the specialty coffee market, should prioritize research on unique coffee strains and cultivation techniques. Collaboration with international coffee research organizations can provide access to advanced technologies and best practices.

Price Stabilization and Risk Management

To mitigate the impact of price volatility, coffee producers should adopt price stabilization mechanisms such as futures contracts and hedging strategies. Establishing cooperatives can also give small-scale farmers better bargaining power and access to financial instruments for managing price risks. Additionally, diversifying product offerings, such as value-added coffee products, can provide alternative revenue streams and reduce dependence on raw coffee prices.

Source: Diarioeconomico, Foodmate, Portal Do Agronegocio