Opinion

W47 Coffee Update: Global Coffee Production Show Recovery in Upcoming Season

Roasted Coffee Beans
Brazil
Market & Price Trends
Raw Common Coffee Bean
Cambodia
Published Dec 1, 2023
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In W47 in the coffee landscape, in MY 2022/23, global coffee production witnessed a minor rebound of 1.7% compared to the preceding season, reaching 171.3 million 60 kg bags. Also, climate change challenges Brazilian coffee growers face could lead to crop damage and decreased yields, despite initial optimism due to the high biennial period. In addition, Colombia's coffee production is expected to recover in MY 2023/24, while Indonesia's coffee production will decline.

Global Coffee Production Shows Slight Recovery in the 2022/23 Season

According to the International Coffee Organization (ICO), global coffee production reached 171.3 million 60-kilogram (kg) bags in the 2022/23 marketing year (MY) 2022/23, a slight recovery of 1.7% compared to the previous season. Arabica is the most produced variety, accounting for 98.6 million bags and a share of 57.5%, followed by Canephora with 72.7 million bags (42.5%). The ICO also predicted a 1.6% year-on-year (YoY) growth in global coffee consumption, reaching 178.5 million bags, leading to a 7.2 million bags deficit in the 2023/24 season, considering the global coffee consumption of 175.6 million bags in the previous season.

Additionally, the ICO's Coffee Market Report for Oct-23 shows that coffee exports from the four central regions totaled 122.98 million 60kg bags, accounting for approximately 72% of the global production. South America led among these exports, with an export volume of 50.59 million bags (41.1% of the total). Asia and Oceania followed closely, with 43.56 million bags exported (35.4%), while Mexico and Central America shipped 15.3 million bags (12.4%). Africa exported 13.53 million bags, accounting for 11.1% of the total.

Colombia's Coffee Production is Expected to Recover in MY 2023/24

The latest United States Department of Agriculture (USDA) Gain Report reveals that Colombia's coffee production decreased by 9.3% YoY in MY 2022/23, generating 10.7 million 60-kg green bean equivalent (GBE) compared to the previous official estimate of 11.3 million bags. However, in MY 2023/2024, the country's coffee production is anticipated to recover and rise to 11.5 million bags. It is expected that the dryer conditions and improved luminosity due to the El Niño phenomenon in the first quarter of 2024 will help in the flowering of the primary coffee harvest in the second half of 2024. Despite the positive outlook, coffee production growth remains modest due to extreme drought conditions that may impact yield and harvest quality. This leads to persistent coffee borer outbreaks that can cause economic loss and diminished cup quality.

USDA Forecast a Declines in Indonesia's Coffee Production

According to USDA, Indonesia's coffee production in the 2023/24 season will decline by 18.1% to 9.7 million bags due to excessive rainfall during the flowering period. Robusta production is expected to decrease by 20% to 8.4 million bags, while Arabica production will slightly decrease by 3.7% to 1.3 million bags.

Brazilian Coffee Growers Face Climate Change Challenges Ahead of 2024/25 Season

Brazilian coffee growers face numerous climate change challenges, which could impact the 2024/25 harvest. The extreme weather patterns they are experiencing include extreme high temperatures, hail, and intense winds and storms. The main concern is the strong gusts of wind, which can exceed 70 kilometers per hour and cause severe crop damage. This could disrupt the proper setting of flowers, significantly impacting productivity during the upcoming season. Despite initial optimism due to the high biennial period, several growers anticipate decreased yields.

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