In W34 in the coffee landscape, Arabica coffee futures on the New York Stock Exchange (NYSE) fluctuated. On Monday, August 21, the Sep-23 contract increased by USD 0.10 cents per pound (lb) to USD 147.55 cents/lb following a weakened dollar against the Brazilian real. This made Brazilian exports less competitive and supported higher quotations. On Wednesday, August 23, Arabica futures surged by 3.75% to USD 152.10 cents/lb, rebounding from a seven-month low of USD 147.10 cents/lb as ICE-monitored Arabica coffee stocks hit a nine-month low of 513,503 bags on the previous day. Moreover, the real's appreciation against the dollar also aided the positive trend by discouraging Brazilian exports. However, on August 25, the Arabica coffee futures market closed down by 0.8% at USD 151.75 cents/lb. The market remains focused on the final stages of the Brazilian crop and decreasing certified stocks on ICE.
Meanwhile, on August 21, the Sep-23 Robusta contract increased by USD 14 per metric ton (mt) to USD 2,558/mt, followed by a significant 2.1% rise to USD 2,628/mt on August 23. The weakening of the dollar against the Brazilian real bolstered prices by reducing the competitiveness of Brazilian exports, positively impacting quotations. Additionally, Robusta's price recovery was aided by low inventories and supply shortages. Inventory levels on the London floor have been consistently decreasing, with a notable drop to 36,150 mt on August 21, equivalent to 602,500 bags weighing 60 kilograms (kg) each. Furthermore, on Wednesday, London Robusta stocks hit an unprecedented low of 3,599 lots, marking the lowest point recorded since historical data tracking began in 2016. However, the positive trend experienced a setback on Thursday, August 24, as Robusta futures witnessed a significant drop to USD 2,565/mt, although futures managed to recover and rise again to USD 2,664/mt as Robusta coffee stocks fell to a record low of 3,408 lots.
Brazil's expected gross revenue from coffee in 2023 is USD 10.01 billion, a 9.22% year-on-year (YoY) decline from the USD 10.85 billion recorded in 2022. The revenue composition comprises USD 7.78 billion from Arabica coffee, accounting for 77.72% of the total, while Robusta and Conilon coffee contribute USD 2.23 billion, representing 22.28% of the overall revenue. The drop in the gross value of production is influenced by climatic conditions and fluctuations in product prices on exchanges, which are linked to the volume of domestic and international crops. Additionally, the ongoing harvest of the 2022/23 coffee crop in Paraná, Brazil, has covered 78% of the 25.8 thousand hectares (ha) of cultivated area. Deral's report states that 90% of the crops are in good condition, while 10% are in average condition. Moreover, anticipated coffee production for the 2022/23 season in the state is projected to reach 41,400 mt, marking a 42% increase compared to the previous season's 29,200 mt (2021/22).
From Jan-23 to Jul-23, South Korea experienced a 3.9% YoY decrease in coffee imports, reaching 109,752 mt. In terms of value, coffee imports saw a more significant decline of 9.5% YoY, totaling USD 646.73 million. If this trend continues, it could mark the first annual decrease in coffee imports in five years. Notably, South Korea's coffee imports have been rising, increasing from 158 thousand mt in 2018 to 189 thousand mt in 2021 and further to 205 thousand mt in 2022. The value of coffee imports also surged, climbing from USD 640 million in 2018 to USD 920 million in 2021 and then reaching USD 1.3 billion in 2022.
