Nov 10

Coffee Weekly Report - 2023 11 10

24/25 Brazilian crop update focuses on SMG, ZDM, and Espírito Santo.
SMG shows uniform rainfall but faces challenges impacting production volume growth. Revised estimate for SMG: 17.93M bags due to higher temperatures affecting foliage coverage.
ZDM experiences rainfall dispersion; however, aided by good foliage coverage, the estimate has been revised up to 9.93M bags.
Espírito Santo has rainfall disparities but an optimistic overall outlook; the figure was revised up, to 22.91M bags (including arabica and robusta).
Alongside other minor adjustments, our arabica figure for 24/25 moved from 47.63M bags to 48.31M bags, and conilon from 23.28M bags to 25.93M bags.
Overall adjustments anticipate a surplus in Supply and Demand outlook, with the global balance potentially reaching 3.38 million bags, based on a revised total production estimate: 184.9 million bags.

In this report, we will go over the last updates on the 24/25 Brazilian crop. In the interest of focusing on the major regions, we will highlight the adjustments to South of Minas Gerais, Zona da Mata, and Espírito Santo.

SMG shows more uniformity in rainfall within the analyzed cities, with an average dispersion of 4% among the three points. However, despite the improvement in precipitation (with the cumulative figure above the average, indicating progress compared to the last 3 years), other factors have impacted the growth of production volume in the region (Appendix I).

With levels similar to those in 2020, especially in the second half of the year, 2023 records higher average temperatures overall in the South of Minas region. This has affected the foliage coverage, which is below the adequate level, and consequently, has impacted productivity. Therefore, our estimate for the region has been changed from 19.35M bags to 17.93M bags (within the 17.22M bags range).

Unlike SMG, Zona da Mata showed greater dispersion of rainfall among the analyzed points (Appendix II).

The region also recorded higher daily temperatures, although not at historically high levels in all areas, as observed in SMG. Good foliage coverage also contributed to protection against more significant damage. Therefore, we readjusted ZDM's figures, closer to the high end of estimates, moving from 8.4M bags to 9.93M bags.

Specific regions contribute to the dispersion of rainfall in Espírito Santo (Appendix III) but the overall outlook is optimistic. Despite the accumulated volume below average in some areas, especially after the volumes recorded in October, the non-uniformity of rainfall does not currently pose a threat to this year's production.

The temperature scenario in Espírito Santo is above average but does not pose immediate risks. Falling short of records in the 20-year historical data, regions are experiencing higher temperatures – a result of El Niño, as in other areas – but there are no immediate threats to productivity at the moment. Consequently, the figure was revised up, to 22.91M bags (including arabica and robusta).

Alongside other minor adjustments, our arabica figure for 24/25 moved from 47.63M bags to 48.31M bags, and conilon from 23.28M bags to 25.93M bags.

As a result, with the revision of Brazil's numbers, the Supply and Demand (S&D) outlook is expected to show a surplus. The midpoint of the global balance shifted from -1.03 million bags to +3.38 million bags in 24/25, with the potential to reach 6.38 million bags in the upper range of estimates, considering a revision of the total production from 180.5 million bags to 184.9 million bags.

The 24/25 Brazilian crop update focuses on South of Minas Gerais, Zona da Mata, and Espírito Santo. SMG experiences uniform rainfall but contends with production challenges, leading to a revised estimate of 17.93M bags due to higher temperatures impacting foliage coverage. ZDM faces rainfall dispersion but maintains good foliage coverage, resulting in an adjustment to 9.93M bags. Despite rainfall disparities in Espírito Santo, the overall outlook is optimistic, with no immediate risks from temperature scenarios. Overall adjustments anticipate a surplus, with the global balance potentially reaching 3.38M bags, driven by a revised total production estimate of 184.9M bags.

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Coffee Weekly Report - 2023 11 10

24/25 Brazil Crop Update

Image 1: Arabica Production, Midpoint and Range – Brazil (M bags)

Image 2: Robusta Production, Midpoint and Range – Brazil (M bags)

Image 3: Global Coffee Production, Midpoint and Range (M bags)

Image 4: Global Coffee Balance, Midpoint and Range (M bags)

In Summary

Appendix I

Appendix II

Appendix III

Weekly Report — Coffee

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