Coffee prices were back on the downtrend this week, with the 145 c/lb support level being an important marker for the first week of October, especially as the recent rains are likely to trigger a second flowering in Brazil, in areas that only registered the first one at the end of August.
Still, besides the 24/25 crop growth in Brazil, October marks the beginning of the 23/24 global cycle, and the main harvest for most washed arabica origins.
Latin American coffee-producing countries posted a record production in 18/19, and after the setback in 19/20, they have struggled to regain previous production levels due to climatic and economic impact. We anticipate a recovery of only 700 thousand bags in the 23/24 cycle, with a larger contribution from Colombia, given the climatic conditions, especially in the southern region of the country.
With the depletion of initial stocks for 23/24 and the expectation of limited production growth, we estimate that Colombia is likely to experience an increase in imports in the cycle starting in October. Consequently, exports may recover in 23/24 but remain below the records set in previous years.