
Nov 17
Coffee Weekly Report - 2023 11 17
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- Ongoing El Niño-induced heatwave in Brazil raises concerns for 24/25 coffee crop. Três Pontas and Patrocínio reported the highest temperatures in 20 years.
- Unlike the 21/22 crop failure due to heat and drought, the current weather hasn't impacted tree development yet. Soil moisture levels for 2023, although decreased, are closer to historical averages than the critical 2020 lows.
- Weather forecasts predict upcoming rain and a temperature drop, providing relief expected to safeguard coffee crop from significant damage. The 7-day forecast indicates higher temperatures in Cerrado until November 24, followed by a gradual decrease in the heatwave's intensity.
- The critical period remains, but overall conditions suggest potential resilience for the 24/25 coffee crop in Brazil, urging cautious optimism in the agricultural outlook.
Brazil's Coffee Crop: Navigating the current heatwave
The heatwave in Brazil is raising concerns regarding the development of the 24/25 coffee crop – a direct impact of the currently active El Niño over coffee producing areas.
Some regions, such as Três Pontas in the South of Minas Gerais, or Patrocínio, in Cerrado, are already reporting the highest temperatures in 20 years. In this analysis, we will consider both cities as a proxy for their regions.
Still, it’s important to note that the increase in temperatures to record-high levels was not uniform across all cities. For other main cities (such as Campos Gerais and Machado), 2020 was the warmest year – which then led to the 21/22 crop failure.
Another point also needs to be addressed: whereas those temperatures alongside drought led to the 21/22 crop failure, this time around, the period of vegetative development of the trees was not affected by water stress, as was the case back then. Only the persistence of this weather pattern can reduce yields for the next crop, especially in regions that were already affected by broca, which thrives under warm weather.
Image 1: Maximum Temperature – Três Pontas (°C)

Source: Somar, Bloomberg, hEDGEpoint
Image 2: Maximum Temperature – Patrocínio (°C)

Source: Somar, Bloomberg, hEDGEpoint
Part of the reason that concerns are more abated when compared to the same period in 2020 is that soil moisture levels are not at the same low levels as seen prior to the 21/22 crop failure.
Charts #3 and #4 show soil moisture levels for 2023 and the previous 6 years, with 2020 marking the lowest level for mid-November in both regions. Comparatively, 2023 is in the middle of the pack, closer to the historical averages.
Nonetheless, it’s important to note that soil moisture levels have decreased during a time when they should have increased, and there’s less leeway for Cerrado than for South of Minas Gerais (or the remaining main-producing regions, for that matter).
In this sense, the current weather scenario does not pose any major threats to the 24/25 crop, provided that it does not remain with the same conditions for long. Weather forecast models suggest that rains will return in the next 7-day period, also alleviating the warm temperatures. Starting on November 17 through November 24, temperatures can still be 4-6 °C higher than average in Cerrado, and 1-4 °C in other regions. Starting on November 25, the extent of the current heatwave is expected to lose some strength.
Image 3: Average Soil Moisture – South of Minas Gerais (mm in top 1.0m soil)

Source: Refinitiv, hEDGEpoint
Image 4: Average Soil Moisture – Cerrado (mm in top 1.0m soil)

Source: Refinitiv, hEDGEpoint
In Summary
The current El Niño-induced heatwave in Brazil sparks worries for the 24/25 coffee crop, with Três Pontas and Patrocínio reporting the highest temperatures in two decades. Unlike the 21/22 crop failure caused by heat and drought, the present weather hasn't impacted tree development.
Soil moisture levels for 2023, although decreased, are closer to historical averages than the critical 2020 lows. While concerns persist, the immediate threat to the 24/25 crop is somewhat alleviated by better soil moisture. Weather forecasts indicate upcoming rain and a temperature drop, providing relief and potentially safeguarding the coffee crop from significant damage.
Weekly Report — Coffee
Written by Natália Gandolphi
natalia.gandolphi@hedgepointglobal.com
natalia.gandolphi@hedgepointglobal.com
Reviewed by Lívea Coda
livea.coda@hedgepointglobal.com
www.hedgepointglobal.com
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