Jan 12

Coffee Weekly Report - 2024 01 12

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  • Colombia's weather has improved disparately, with some regions reporting favorable conditions in coffee-growing areas. The upcoming drier weather may aid main crop harvesting, but attention is required for the mitaca.

  • Responding to reduced production in 22/23, Colombia curtailed export volumes, resulting in higher beginning stocks for the 23/24 cycle, consequently, Colombia differentials are anticipated to face pressure from stock/use levels until September.

  • In conclusion, while benefiting from improved weather in specific regions, Colombia confronts a multifaceted landscape with variable climate patterns and export challenges. The anticipated production increase in 23/24 only marginally offsets recent deficits, relying on stocks for higher availability and potentially impacting differentials.

Colombian Coffee: Navigating Weather and Exports

The weather has improved in Colombia, but not uniformly. While some regions are reporting favorable vegetation indices, adequate precipitation, and suitable temperatures, this trend does not cover all coffee-growing areas (Figures 1 and 2).

Furthermore, the drier weather expected in the coming days may aid in harvesting the main crop, but attention is needed for the mitaca.

Additionally, the country reduced export volumes beyond what was necessary to accommodate the production reduction in 22/23, with producers on the sidelines, reluctant to sell at local price levels throughout the entire cycle. Consequently, the country begins the 23/24 cycle with higher beginning stocks.

Figure 1: Precipitation Anomaly (Jan 04 to Jan 11, % of normal)

Source: USDA

Figure 2: NDVI Anomaly (Jan 03 to Jan 08)

Source: USDA


In tandem, slightly higher production, already seen in the first months of the cycle, also contributes to the increase in availability.

The scenario suggests that Colombia differentials will remain pressured by the stock/use levels expected for the 23/24 cycle, that runs until September.

Figure 3: Supply and Demand Balance – Colombia (‘000 bags)

Source: hEDGEpoint

Simultaneously, there is a decline in the exports of soluble coffee in Colombia. According to the latest data released by the FNC (November 2023), Colombian exports of soluble coffee have shown a downward trend.

In 2023, the country recorded exports of 537 thousand bags, marking a 17% reduction compared to the same period in 2022 (644 thousand bags) – a trend that has been reported despite the higher total export volume in November when compared to the same period last year.

As Colombia grapples with uneven weather conditions affecting different coffee regions, the agricultural sector faces the challenges of mitigating the impact on harvests. The firm stance in initiating cycle 23/24 reflects a proactive approach to the evolving dynamics of production and export. However, the declining trend in soluble coffee exports adds a layer of complexity, highlighting the need for adaptive strategies to address changing market demands.

Figure 4: Monthly Exports – Colombia (‘000 bags)

Source: FNCC

Figure 5: Soluble Coffee Exports – Colombia (60kg scs)

Source: FNCC

In Summary

In conclusion, while Colombia benefits from improved weather conditions in certain regions, the coffee industry is navigating a complex landscape. The challenges posed by variable climate patterns and export dynamics suggest that, while the increase in production expected for 23/24 only contributes slightly to offsetting the deficit scenario seen in the country in recent years, stocks will allow for higher availability – which, in turn, can put pressure on differentials.

Weekly Report — Coffee

Written by Natália Gandolphi
Reviewed by Lívea Coda


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