1. Weekly News

Brazil

Brazil’s 2024/25 Coffee Harvest Sales Accelerated

Brazil’s 2024/25 coffee harvest sales have accelerated, with 54% of total production sold as of September 10, 2024. This reflects an increase of 14% from the previous month and is in line with the five-year average, according to Brazilian consultancy Safras & Mercado. Arabica coffee sales account for 48% of production, a slight rise from 47% last year but still below the five-year average of 52%. A Safras & Mercado consultant attributes the cautious sales approach to high prices and uncertainties surrounding the 2025/26 harvest. Early sales of the 2025/26 Arabica harvest have also begun, with 11% of Arabica production already negotiated, which equates to around 8% of the country’s total coffee output.

Conilon coffee sales have increased, with 66% of the production sold by early Sep-24, compared to 57% in 2023 and 56% for the five-year average. A smaller-than-expected harvest and high global prices drive rapid sales. The market remains focused on exports, with the domestic industry reducing Conilon purchases and increasing the use of Arabica in blends. The evolution of negotiations, particularly with Arabica, reflects a cautious and strategic approach by producers who aim to secure a favorable financial outcome in a market characterized by volatility and climate uncertainties.

Brazil’s 2024/25 Coffee Harvest Sales Accelerated

According to the Brazilian Institute of Geography and Statistics (IBGE), Brazil’s coffee production for 2024 is estimated at 59.7 million 60-kilogram (kg) bags, reflecting a 1.6% decrease from the previous estimate in Aug-24, amid a drought that affected the size of coffee beans. Despite the downward revision, this marks a 4.8% year-on-year (YoY) growth, driven by a 3.6% YoY increase in average yield and a 1.2% YoY rise in the harvested area.

For Arabica coffee, the estimated production is 42 million 60-kg bags, representing a slight decline of 0.4% from the previous forecast but showing a robust 6.5% YoY growth. Meanwhile, the canephora (Conilon) coffee production estimate is 17.7 million 60-kg bags, a 4.4% drop from the earlier projection, attributed to a 3.3% decrease in the harvested area and a 1.1% decline in average yield.

Brazil's Coffee Exports Reached Record High in 2024

In Aug-24, Brazil exported 3.73 million 60-kg bags of coffee, generating USD 955.6 million in revenue. This represents a 0.7% YoY increase in volume and a 31% YoY growth in value due to solid demand. The cumulative coffee exports from Jan-24 to Aug-24 reached a record high of 31.89 million 60-kg bags. In addition, in the first two months of the 2024/2025 crop year (Jul-24 and Aug-24), Brazil shipped 7.52 million 60-kg bags of coffee, showing an 11.8% YoY increase compared to the 6.72 million bags last year. The export revenue increased by 39.1% YoY, rising from USD 1.36 billion to USD 1.89 billion.

Germany and European Union

Germany Requests Six-Month Delay for EUDR

On September 13, 2024, Germany formally requested the European Union (EU) to postpone the implementation of the EU Deforestation Regulation (EUDR), which aims to ban the import of products linked to deforestation. The request comes from the concerns about the EUDR's potential impact on farmers and the forestry sector in Germany and other exporting countries. This appeal came just one day after Brazil made a similar request. Set to take effect at the end of Dec-24, the regulation would prohibit coffee, cocoa, soy, timber, palm oil, beef, printing paper, and rubber imports from areas deforested after Dec-20.

The concerns are not limited to Germany. Countries across Latin America, Asia, Africa, and even the United States (US) also expressed concerns over the administrative burden the EUDR could impose on farmers. Strict traceability and environmental monitoring requirements may be challenging for emerging economies that rely heavily on exporting agricultural and forestry products. The debate now revolves around balancing environmental protection and the economic realities producers face worldwide.

Vietnam

Vietnam’s Coffee Exports Decreased 1% MoM in Aug-24

According to the General Department of Vietnam Customs, Vietnam’s coffee exports decreased by 1% month-on-month (MoM) to 76.21 thousand metric tons (mt) in Aug-24 due to supply shortage. The cumulative exports from Jan-24 to Aug-24 totaled 1.056 million metric tons (mmt), down 12.1% YoY from the same period last year.

2. Weekly Pricing

Weekly Coffee Pricing Important Exporters (USD/kg)

Yearly Change in Coffee Pricing Important Exporters (W37 2023 to W37 2024)

Brazil

In W37 2024, coffee prices in Brazil decreased by 0.45% week-on-week (WoW) to USD 6.65/kg, following a significant rise in previous weeks. The weekly price decline is due to weak futures prices driven by the depreciation of the US dollar against the Brazilian real. Despite the slight weekly drop, prices remain elevated, showing an 8.13% MoM increase and a 12.90% YoY rise. The sustained price increases throughout 2024 are driven by insufficient supply due to droughts and heat waves, which have impacted the 2025/26 coffee production outlook. Producers are adopting cautious and strategic selling approaches to ensure a favorable financial outcome in a market characterized by volatility and climate uncertainties.

Columbia

Colombia’s coffee prices continued their downward trend in W37, declining by 0.27% WoW to USD 7.39/kg. The MoM drop is 4.77%, while YoY prices have fallen by 5.01%. The WoW price decrease is due to the country’s adaptation to the EU’s traceability regulations, which has impacted export flows. In addition, the price fluctuation of the coffee futures on the New York and London Exchanges put further downward pressure on Colombian coffee prices. However, given the short supply due to production challenges and the growing export demand, the price will likely recover.

Vietnam

In W37 2024, Vietnam’s coffee prices increased by 1.46% WoW to USD 4.86/kg, following a 2.32% MoM rise. The country’s coffee production faces challenges from climate change, resulting in lower output and inventory levels. Consequently, Vietnam's coffee exports fell by 1% MoM in Aug-24. Although the country’s 2024/25 coffee harvest will begin in Oct-24, which is expected to improve supply, prices have remained high due to crop losses from dry weather at the beginning of the season. Similar production challenges in Brazil suggest that coffee prices will continue their upward trend globally.

3. Actionable Recommendations

Optimize Post-Harvest Processing and Export Strategies

Vietnamese coffee exporters should enhance their post-harvest processing and storage practices to capitalize on high coffee prices despite current supply challenges. Investing in modern processing facilities and quality control measures will ensure that coffee remains in top condition and meets international standards. Additionally, exporters should strategically time their shipments to align with high-demand periods and favorable market conditions. Vietnamese exporters can maximize revenue and maintain market competitiveness by optimizing export logistics and working closely with buyers to negotiate favorable terms.

Adopt Long-Term Water Management Strategies

Brazilian producers should invest in sustainable irrigation systems and water conservation methods to counter the challenges of droughts and heat waves affecting the 2025/26 coffee harvest. Given the long-term impact of climate change, diversifying water sources and implementing efficient irrigation practices to mitigate the risks of production losses are essential.

Promote Cross-Border Knowledge Exchange

Coffee producers from Brazil, Colombia, and Vietnam should collaborate on knowledge exchange platforms to share insights on climate adaptation strategies and regulatory compliance. Coordinating efforts to address global challenges like climate change and sustainability will position these countries as leaders in the coffee industry and enhance resilience to market volatility.

Sources: Tridge, Portal Do Agronegocio, NoticiasAgricolas, Mercado Do Cacau