
Feb 2
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Natália Gandolphi
Coffee Weekly Report - 2024 02 02
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- In June, the European Union enacted legislation targeting deforestation, mandating that imported products adhere to specific environmental standards.
- This regulatory development may account for the decrease in coffee stock levels, which hit a nadir of 7.28 million bags in December, covering only 8-10 weeks of EU consumption compared to the standard 15-16 weeks.
- The alteration in imported coffee patterns is evident in the increase to 64% arabica imports in November, up from 54% in July 2023. Cumulative EU coffee imports for the 23/24 period total 7.1 million bags, slightly below the anticipated 7.9 million.
- Although demand has surged to 10.1 million bags from 8.6 million last year, it is influenced by factors beyond market forces and warrants cautious consideration.
European Union Demand Analysis
At the end of June, the European Union approved a new set of legislative norms to combat deforestation – imported products need to certify that they are not linked to environmental damage. From that month onwards, the trend cannot be simply explained by slightly higher demand or impacts from high storage costs. Therefore, the stock withdrawal may be very well-connected to the new legislative rules in the bloc.
Stocks reached 7.28M bags in December, the lowest level in the available series (since December 2013). Currently, stocks can only cover about 8-10 weeks of consumption in the European Union, when, on average, the bloc carries the amount to cover roughly 15-16 weeks’ worth of roaster consumption.
It’s important to note that the trend in imported coffee continues to change. In November, roughly 64% of the total coffee imported by the European Union was arabica coffee, in contrast to the 54% low reported in July 2023 – which suggests that, while London remains as reference, that trend is only temporary.
Figure 1: ECF Stocks (M bags)

Source: European Coffee Federation
Figure 2: Share of Arabica Imports in Total – European Union (%)

Source: Eurostat
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Cumulatively in 23/24, the European Union imported 7.1M bags – slightly lower than the 7.9M bags expected for the period, considering a 1% increase in imports to support a 1.5% increase in demand – however, it’s still early to affirm that this will last throughout the whole cycle.
In fact, in order to go back to normal stocks levels in the bloc, imports would need to ramp up in this cycle. Still, we highlight the argument from earlier in the report: even though stocks fell more than expected, likely due to the new deforestation regulation, that coffee may just have been reallocated.
For the cumulative figure in 23/24, apparent consumption results may also be still reflecting this trend: the bloc has reportedly consumed 10.1M bags, vs. 8.6M bags at the same period last year – which was a record. In this sense, demand figures are bullish, but should be considered carefully, since part of the movement is exogenous to the market demand itself.
Figure 3: European Union Coffee Imports (M bags)

Source: Eurostat
Figure 4: European Union Apparent Consumption (M bags)

Source: Eurostat, ECF, hEDGEpoint
In Summary
In June, the European Union approved legislation against deforestation, requiring imported products to certify certain environmental standards.
This may explain the stock withdrawal, reaching a low of 7.28M bags in December, covering only 8-10 weeks of EU consumption compared to the usual 15-16 weeks.
This may explain the stock withdrawal, reaching a low of 7.28M bags in December, covering only 8-10 weeks of EU consumption compared to the usual 15-16 weeks.
The shift in imported coffee trends shows 64% arabica imports in November, up from 54% in July 2023. Cumulative 23/24 EU coffee imports of 7.1M bags are slightly below the 7.9M expected.
While demand appears bullish, reaching 10.1M bags, up from 8.6M last year, it's influenced at the moment by factors beyond market consumption itself, and therefore, should be considered carefully.
While demand appears bullish, reaching 10.1M bags, up from 8.6M last year, it's influenced at the moment by factors beyond market consumption itself, and therefore, should be considered carefully.
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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