1. Weekly News

Brazil

Record Growth in Brazil's Coffee Production Value in 2024

The gross production value (GPV) of Brazil's coffee sector reached USD 12.41 billion (BRL 72.25 billion) in 2024, a 39.77% increase from USD 8.89 billion (BRL 51.69 billion) in 2023. The Southeast region contributed 86.14% of this total, amounting to USD 10.70 billion (BRL 62.24 billion), with Minas Gerais leading at USD 6.30 billion (BRL 36.62 billion). Other key contributors included Espírito Santo with USD 3.07 billion (BRL 17.85 billion), São Paulo at USD 1.26 billion (BRL 7.35 billion), and Rio de Janeiro with USD 68.96 million (BRL 401.42 million). Led by Bahia, the Northeast ranked second nationally with USD 879.53 million (BRL 5.12 billion). Driven by Rondônia, the North followed with USD 586.00 million (BRL 3.41 billion). The South and Central-West regions contributed USD 150.96 million (BRL 878.12 million) and USD 104.08 million (BRL 605.43 million), respectively. Based on the Ministry of Agriculture's GPV analysis, these figures highlight coffee's critical role in Brazil's economic and rural development.

Climate Challenges and Sustainability in Brazilian Coffee Farming

Brazilian coffee farming faces significant challenges in 2024 due to one of the worst droughts in decades, particularly affecting regions like Sul de Minas, Cerrado Mineiro, and Alta Mogiana. The current harvest has declined by 0.5%, with experts predicting a production drop of up to 40% in 2025. Severe water deficits, surpassing 300 millimeters (mm) in many areas, have damaged crops, reduced fruit size, and increased pest infestations. Drip irrigation has emerged as a vital solution, boosting productivity by up to 20 sacks per hectare (ha) and mitigating losses. Adopting such technologies is essential for ensuring the sustainability and resilience of Brazilian coffee farming amid climate crises.

Logistical Challenges Hamper Brazilian Coffee Exports in 2024

Brazilian coffee exporters faced severe logistical bottlenecks in 2024 due to inadequate port infrastructure for containerized shipments. By October, 1.717 million 60-kilogram (kg) bags remained unshipped, resulting in missed revenues of USD 489.72 million (BRL 2.75 billion), based on an average FOB price of USD 285.21 per bag. Port delays and disruptions, particularly at Santos and Rio de Janeiro, compounded these issues, with 69% of vessels experiencing delays or schedule changes. Despite record monthly exports of 4.926 million bags in October, these achievements stemmed from exporters' logistical efforts rather than favorable conditions. Cecafé, the Brazilian Coffee Exporters Council, emphasized the urgent need for investments in port capacity, infrastructure upgrades, and diversified transportation to enhance Brazil's competitiveness in global markets.

Brazil's Coffee Export Concerns as Stocks Decrease and Drought Impacts Harvest

Brazil, the world's largest coffee producer, faces mounting concerns over its coffee exports for the current season and the upcoming harvest. Arabica coffee prices have surged, nearing 2011 highs, while the country has already sold 70% of its crop as of November 12, 2024, compared to 64% last season. Experts fear that Brazil may run out of stock before the next season as coffee exports continue rapidly. The United States Department of Agriculture (USDA) has lowered its forecast for Brazil's coffee stocks, predicting a 26% decrease year-on-year (YoY), with only 1.2 million bags expected to remain by the season's end. Additionally, the effects of a severe drought earlier this year raise concerns about the next harvest, as the coffee trees may have been stressed, reducing future production potential.

USDA Revises Brazil’s 2024/25 Coffee Production Estimate Down to 66.4 Million Bags

The USDA has lowered Brazil's coffee production estimate for the 2024/25 harvest to 66.4 million 60-kg bags, a 5.8% reduction due to adverse weather, including droughts and high temperatures, particularly affecting arabica crops. Despite this, production remains slightly higher than the previous year. Arabica production is expected to increase by 1.1%, while Robusta output is set to decline by 2%. The El Niño phenomenon intensified climatic challenges, causing accelerated bean maturation and smaller fruits. Exports rose 33% in Sep-24, but total exports for 2024/25 are forecasted to decrease by 5.3%. Domestic consumption remains stable, constrained by high retail prices.

China

China's Coffee Imports and Exports Show Mixed Trends in 2024

In Sep-24, China's coffee and coffee product imports totaled USD 96 million, marking a 16.75% YoY decrease, with the volume dropping by 32.21% to 13,900 tons. However, in the first nine months of the year, imports reached USD 1.026 billion, a 32.88% increase, with a 47.34% rise in volume to 189,900 tons. Brazil remained the leading supplier, with imports growing by 88.87%. On the export side, China's coffee and coffee product exports in September amounted to USD 22 million, up 115.12%, with a volume increase of 92.15%. In year-to-date terms, exports totaled USD 231 million, a 116.69% increase, with Germany being the top export market, experiencing a remarkable 1742.86% growth.

Colombia

Colombia's Coffee Harvest Forecasted to Reach 12.9 Million Bags in 2024/25

Colombia's coffee production for the 2024/25 season is estimated at 12.9 million 60-kg bags, reflecting a 1.1% increase from the previous year's revised figures. The forecast indicates favorable weather conditions and improved agronomic practices by producers to mitigate the impacts of climate change. Coffee exports are expected to reach 12 million bags, with imports estimated at 1.4 million bags, showing stable consumer demand. While the United States (US) remains the top market for Colombian coffee, China is emerging as an increasingly significant importer.

El Salvador

Salvadoran Coffee Growers Concerned About Impact of Continued Rainfall on 2024/2025 Harvest

Salvadoran coffee growers worry that heavy rainfall could reduce the 2024/2025 coffee harvest. The Salvadoran Coffee Association (Acafesal) expressed concern over the situation, with flooding in coffee plantations potentially spreading coffee rust (roya) and increasing pest infestations. Producers have already lowered their production targets for the year, and some mature coffee beans may crack and fall due to the rain, particularly varieties like Pacamara and Bourbon. Additionally, there are concerns about labor shortages for harvesting fallen beans. Despite these challenges, the Coffee Trade Association expects production for the 2024/2025 season to match the 2023/2024 harvest of 893,326 quintals (approximately 89,332.6 tons), which saw a 1.8% increase compared to the previous season.

Ethiopia

Ethiopia Launches National Coffee Platform to Strengthen Global Market Position

Ethiopia has introduced the National Coffee Stakeholder Engagement Platform to unify players across its coffee value chain, from farmers to policymakers. This initiative aims to boost coffee quality, productivity, and marketing strategies, enabling Ethiopia to compete in the specialty coffee market. With coffee contributing USD 1.43 billion to exports last fiscal year, the platform seeks to address challenges like quality consistency and infrastructure gaps while targeting USD 2 billion in export revenue by 2024/2025. It also fosters collaboration, attracts foreign investment, and highlights coffee's cultural significance, positioning Ethiopia for sustained growth in the global coffee industry.

Nepal

Nepal's Coffee Imports Surge Amidst Limited Domestic Production

In the 2023/24 fiscal year, Nepal imported 443 tons of coffee, nearly seven times more than a decade ago, with a total import value of USD 3.12 million (NPR 419.8 million). Despite the growth in coffee culture, Nepal's domestic production remains limited, with coffee cultivated primarily in the western-central region of Ampachaur since 1958. The total coffee-growing area in the country is 4,309 ha, producing 501 tons in 2023/24, of which 17% is exported to markets like the European Union (EU), Japan, South Korea, and the US. The average export price of Nepalese coffee is three times higher than the import price, reflecting its superior quality. However, the government continues focusing on expanding production to meet domestic and international demand.

Peru

Decline in Peru's Coffee Production and Export Challenges Amidst Global Demand Growth

Peru currently has 380 thousand ha of coffee and is projected to produce 250 thousand tons in 2024, reflecting a 5.5% decrease from the previous year's 264,500 tons. Despite this drop, the value of the national coffee sector is USD 3.8 billion, with coffee providing significant employment and export value. In 2023, Peru exported 4.4 million 60-kg bags of coffee, contributing 2.48% of global supply, and is expected to export 5.6 million quintals in 2024. However, declining productivity, climate change, pests, and limited public-private cooperation hinder further growth. The National Coffee Board urges immediate reforms, including investment in coffee-growing regions, improved governance, and adaptation to sustainability standards to maintain its market share amid rising global demand.

2. Weekly Pricing

Weekly Coffee Pricing Important Exporters (USD/kg)

Yearly Change in Coffee Pricing Important Exporters (W47 2023 to W47 2024)

Brazil

Coffee prices in Brazil increased significantly, rising to USD 7.50/kg in W47, with a week-on-week (WoW) gain of 6.99%, a month-on-month (MoM) rise of 13.12%, and a YoY surge of 32.51%. Severe droughts in key regions like Sul de Minas and Cerrado Mineiro reduced yields and bean quality, while USDA estimates forecast a 26% YoY drop in stock levels, tightening supply. Additionally, a surge in export activity (70% of the crop sold) and higher global demand contributed to upward price pressure. Despite a gross production value rise to USD 12.41 billion, concerns about future harvests due to climate stress suggest prices may remain elevated.

Colombia

Coffee prices in Colombia showed relative stability this week, with a WoW increase of 0.96% and a MoM rise of 1.10%, as prices moved slightly to USD 7.35/kg in W47 after minor drops in W46. The YoY decrease of 8.24% reflects improved supply conditions this season and positive production outlooks. Colombia's coffee output for 2024/25 is projected to reach 12.9 million 60-kg bags, up 1.1% YoY, due to favorable weather and improved agronomic practices. With forecasts indicating steady production, prices could experience further slight declines.

Vietnam

Coffee prices in Vietnam experienced a WoW increase of 2.05% and a MoM rise of 5.18%, reaching USD 4.47/kg in W47. These price gains follow earlier declines caused by an 11.2% drop in coffee exports during the first ten months of 2024, which stemmed from supply challenges. Previous price decreases were linked to surplus concerns driven by heightened production in Vietnam and other regions. The current rebound, including a slight WoW increase in W46, signals market adjustments as supply-demand dynamics stabilize, reflecting a countereffect of recent corrections. Further price trends will depend on how these dynamics evolve.

3. Actionable Recommendations

Expand Speciality Coffee Offerings

Specialty coffee is rapidly growing in global markets, particularly in regions like the US, Europe, and Asia. For producers in countries like Brazil, Colombia, and Ethiopia, focusing on high-quality, traceable, and ethically sourced coffee offers a chance to boost export revenues. Investing in micro-lots, certifications, and partnerships with roasters and specialty coffee importers can help tap into the rising demand for artisanal coffee. Emerging coffee-producing nations like Nepal should target niche markets by highlighting their single-origin products to stand out in the competitive global market.

Infrastructure Investment to Improve Export Efficiency

To enhance coffee export competitiveness, countries like Brazil and Colombia must prioritize investments in infrastructure, particularly in port facilities, road networks, and logistics technology. Upgrading ports to handle containerized shipments and improving connectivity between coffee-growing regions and export hubs will reduce delays and transportation costs. Public-private partnerships for modernizing infrastructure and adopting digital supply chain solutions are key steps to ensure faster, cost-effective exports, maintaining competitiveness as global demand for specialty coffee increases.

Enhancing Sustainability in Coffee Production for Climate Resilience

Sustainability in coffee production is critical to address climate change impacts. Farmers in regions like Brazil and Ethiopia must adopt water-saving technologies, such as drip irrigation, and sustainable farming practices to safeguard against droughts and extreme weather. Diversifying crops and using agroforestry methods can also enhance resilience. Exporters should support farms that prioritize environmental stewardship and promote these practices to attract environmentally-conscious consumers, while governments and NGOs can provide technical support and funding to help farmers transition to more sustainable methods.

Sources: Tridge, Agraria PE, Agro Business UA, Cecafé, Food Mate, Further Africa, Noticias Agricolas, Portal do Agronegocios