Feb 21
/
Laleska Moda
Conilon exports fall in January, but 24/25 is on track for record
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- Brazil's coffee exports fell slightly in January. While Arabica shipments remained firm, Conilon registered a significant drop last month, possibly reflecting the bean's lower availability and demand, as buyers may wait for the 25/26 harvest before making new purchases.
- However, the total accumulated shipments in 24/25 (Apr-Jan) already exceeds 42 million bags and should lead to a year of record exports.
- Regarding the destination of Brazilian beans, the demand for Arabica increased in all destinations, especially in the US and the EU. For Conilon, there was a slight drop in shipments to the US, but a significant increase to the EU and Asia, including Japan.
- For 25/26, however, we initially expect a slight drop in exports of both varieties, due to lower Arabica production, lower stocks of both varieties, and a possible increase in domestic consumption of Conilon.
Conilon exports fall in January, but 24/25 is on track for record
Total Brazilian coffee exports amounted to 3.97 M bags in January, a slight reduction of 1.6% compared to 2024. The drop was mainly due to the decline in Conilon exports to 318.07K bags compared to 461.31K in January 2024 (-28.9%). Meanwhile, Arabica coffee exports performed similarly to last year, with 3.28 M bags shipped in January, compared to 3.29 M bags last year (-0.3%).
The drop on the Conilon side happened due to both the lower availability of the variety in Brazil - given the above-average sales up until December and low carryover stocks - and an estimated reduction in demand. It's important to remember that demand for the Brazilian Conilon was high during 2024, leading to above-average exports, which may have led to a recovery in stocks of the variety at destinations. In addition, with the 25/26 harvest approaching in Brazil, buyers may wait until availability of Brazilian beans on the market rises before purchasing Conilon again.
Even so, considering the cumulative volume of the 24/25 harvest (Apr-Jan), more than 42 M bags of coffee were exported, an increase of 21.7% compared to 23/24, the last harvest with record shipments, which indicates that 24/25 could end up as the largest in history in terms of exports. Regarding green coffee, Arabica has accumulated 31.05 M bags this season, while Conilon already totals 7.79 M bags, both records for the period and up 15.3% and 58.6% on 23/24, respectively. It's worth remembering that Conilon increased its share of exports between 2023 and 2024, due to the reduction in supply in Vietnam.
Brazil: Green Arabica Exports (M bags)
Source: Cecafé
Brazil: Green Conilon Exports ('000 bags)
Source: Cecafé
In terms of the main buyers of Brazilian coffee, Arabica increased its share in the 24/25 crop in all destinations compared to the recent years average, especially in the European Union and the United States. On the other hand, compared to the same period in the 23/24 season, there was a slight drop in the bean's presence in Asia. On the Conilon side, while there was a considerable increase in shipments to Asia and the EU, there was a slight decline in exports to the US. Comparing only 24/25 and 23/24 harvests, the movement was also similar.
Expectations for the next few months of the 24/25 season indicate lower shipments. This is primarily due to the reduced supply in Brazil and the upcoming 25/26 harvest season. Even so, as already mentioned, we expect this cycle to continue with record total shipments.
Brazil: Arabica Exports by Destination (bags)
Source: Cecafé
Brazil: Conilon Exports by Destination (bags)
Source: Cecafé
On the other hand, concerning 25/26, our expectations are for a reduction in Arabica and Conilon exports. For Arabica, the expected drop reflects lower production in the next cycle. However, lower stocks and an arbitrage favoring Robusta consumption over the variety could also limit shipments throughout the season, especially if futures prices once again rise above the 400 c/lb mark.
In Conilon’s case, while higher production would tend to favor exports, we must remember that 24/25 was marked by a substantial increase in the share of Brazilian beans in global exports, bringing stocks of the variety in Brazil to their lowest levels in history. In addition, with the current levels of spread between Arabica and Conilon prices in the country, we expect the use of the latter variety in the national blend to be favored, leading to an increase in consumption and a limitation on grain exports.
In Conilon’s case, while higher production would tend to favor exports, we must remember that 24/25 was marked by a substantial increase in the share of Brazilian beans in global exports, bringing stocks of the variety in Brazil to their lowest levels in history. In addition, with the current levels of spread between Arabica and Conilon prices in the country, we expect the use of the latter variety in the national blend to be favored, leading to an increase in consumption and a limitation on grain exports.
Hedgepoint: Brazil Arabica Supply and Demand (M bags)
Source: Hedgepoint
Hedgepoint: Brazil Conilon Supply and Demand (M bags)
Source: Hedgepoint
In Summary
Despite the decline in Conilon exports since the end of 2024 and an expected reduction in shipments in the coming months, the Brazilian 24/25 season is likely to end with record shipments. This scenario could occur on both the Conilon and Arabica sides. In general, Brazil has increased its exports considerably to the European Union and Asia. Concerning the American market, there was an increase in shipments of Arabica, but a slight drop in Conilon.
On the other hand, our initial projections for 25/26 indicate a decline in exports. On the Arabica side, the main limiting factor could be lower production and lower initial stocks. For Conilon, in addition to these factors, we expect an increase in domestic consumption of the variety in the next cycle, due to its lower prices compared to Arabica.
Weekly Report — Coffee
Written by Laleska Moda
laleska.moda@hedgepointglobal.com
Reviewed by Lívea Coda
livea.coda@hedgepointglobal.com
livea.coda@hedgepointglobal.com
www.hedgepointglobal.com
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