Jan 19

Coffee Weekly Report - 2024 01 19

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  • Conab's 2024 first coffee crop assessment is out: arabica production shows a 4.74% YoY increase, reaching 40.75 million bags, and yields see a 2% improvement. Despite these positive indicators, the volume falls short, 6% below the projected 2024 trend.

  • Even with advancements from 2022, yields still lag behind on-year expectations by 10%, prompting a shift in focus towards the 26/27 cycle for a potential record match. This adjustment aligns with a 3% YoY increase in productive coffee-growing areas.

  • In the conilon category, an estimated 17.3 million bags signal a 7% YoY rise. Variable rainfall, influenced by El Niño, affected fruiting, yet a slight expansion in cultivated area and overall positive crop development counteract challenges, with isolated cases of diseases being the only – yet not substantial – concern.

Conab’s 2024 Crop Update

Conab recently released its initial assessment of the 2024 coffee crop (24/25 cycle), revealing notable figures for both arabica and conilon varieties.

Arabica production recorded a positive trend with 40.75 million bags, marking a 4.74% increase and 1.84 million bags year-over-year (YoY).

However, when considering on-years for arabica production, the volume falls 6% below the expected trend for 2024 based on Conab's historical series (43.36 million bags). Despite this, it represents an improvement from the 23% decline below the trend observed in 2022.

Yields for arabica also experienced a 2% increase, reaching 26.7 bags/ha. Yet, this figure is 10% below the trend for on-years, signaling a gap between actual results and expectations. Additionally, it only slightly exceeds the average expected for an on-year based on data since 2010 (26.3 bags/ha) and is 17% below the historical record reported in 2020 by Conab (32.2 bags/ha).

This suggests that while performance is better than in 2023, it has not fully reached the potential expected for an on-year. Consequently, attention is shifting to the 26/27 cycle to achieve a crop comparable in yield and size to the record set in 2020.

Figure 1: Brazilian Arabica Crop – Conab (M bags)

Source: Conab

Figure 2: Brazilian Arabica Area – Conab (‘000 ha)

Source: Conab

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This adjustment is a consequence of the trend in active coffee-growing areas, which saw a 3% YoY increase, reaching 1526 thousand hectares, despite ongoing challenges from irregular weather conditions.

Turning to conilon, despite its controversial market perception, Conab estimates the 2024 crop at 17.3 million bags, a 7% increase from 2023. The report highlights the crop's exposure to fluctuating rainfall influenced by El Niño, with beneficial rains between May and August 2023 aiding post-harvest recovery.

However, a shortage of rainfall from September led to water stress, impacting fruiting. While this cycle didn't incur losses from strong winds, high temperatures caused damage to leaves and roots, affecting photosynthetic potential. Despite these challenges, the initial outlook suggests a slight increase in cultivated area, and overall, the crops are developing well, except for isolated cases of cancro.

Figure 3: Brazilian Arabica Yields – Conab (bags/ha)

Source: Conab

Figure 4: Brazilian Conilon Crop – Conab (M bags)

Source: Conab

In Summary

Conab's 2024 coffee crop assessment reports positive trends: Arabica production rose 4.74% YoY to 40.75 million bags, with a 2% increase in yields. However, it falls 6% below the expected trend for 2024. Despite improvements from 2022, yields remain 10% below on-year expectations, prompting attention towards the 26/27 cycle for a record match.

This adjustment is attributed to a 3% YoY increase in productive coffee-growing areas. For conilon, estimated at 17.3 million bags, a 7% YoY increase, the crop faced variable rainfall due to El Niño, impacting fruiting. Despite challenges like high temperatures causing damage, there is a slight increase in cultivated area, with positive overall crop development, except for isolated cases of diseases.

Weekly Report — Coffee

Written by Natália Gandolphi
[email protected]
Reviewed by Lívea Coda
www.hedgepointglobal.com

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