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- El Niño impacted Brazil's coffee-producing regions in Q4/2023, causing unprecedented temperatures and irregular rainfall, raising uncertainty regarding the 24/25 crop output.
- In South Minas Gerais, record-high temperatures persisted despite the El Niño subsiding in early 2024, posing ongoing challenges for coffee cultivation. Still, water reserves helped maintain average year-end levels.
- Cerrado faced low rainfall and 10-year high temperatures throughout 2023. As 2024 began, optimism waned with cumulative rainfall levels reported 30% below normal, setting a less optimistic tone for the upcoming crop cycle.
- Espírito Santo, heavily impacted by El Niño, faced high temperatures and record-low cumulative rainfall by the end of 2023. Concerns for 2024 center on low rainfall levels, potentially hindering the 24/25 conilon crop despite a slight improvement in early 2024.
Recent El Niño Impacts in Brazil
The coffee industry faced weather anomalies in the last quarter of 2023, largely influenced by the El Niño pattern that dominated the main coffee producing regions in Brazil. Unprecedented temperatures and irregular rainfall characterized this period, impacting production and creating a ripple effect on the coffee market.
In South Minas Gerais, temperatures soared to record levels, disrupting the usual climate patterns. Despite the El Niño pattern subsiding by the beginning of 2024, temperatures remained above average, posing a continued challenge for coffee cultivation. The water reserves built in 2023 helped alleviate the impact of lower rainfall in November and December, maintaining average year-end levels. However, the outlook for 2024 is concerning, with rainfall levels currently reported to be below average, adding pressure to an already precarious situation.
Cerrado faced a different set of challenges, experiencing consistently lower rainfall throughout the year. By the last quarter, cumulative rainfall volumes were already below those recorded in 2021. Coupled with temperatures at a 10-year high, the region faced increased pressure on coffee production. As the new year began, optimism was scarce, with cumulative rainfall levels reported to be 30% below normal, setting a less optimistic tone for the upcoming crop cycle when compared to the post-flowering period.
Figure 1: Cumulative Precipitation (mm) – SMG
Figure 2: Cumulative Precipitation (mm) – Cerrado
The proximity to Espírito Santo exposed ZMT to the impact of El Niño, with consistently below-average rainfall in the last quarter of 2023. Although the region experienced a shorter period of extreme temperatures, concerns for 2024 primarily revolve around low rainfall levels, despite a subsiding of temperatures. These conditions may hinder the 24/25 crop from surpassing the record set in previous crops.
Espírito Santo bore the brunt of El Niño during the last quarter of 2023, with persistently high temperatures in January exacerbating the situation. Record-low cumulative rainfall figures by the end of 2023 cast a shadow over Brazil's 24/25 conilon crop, despite a slight improvement in the beginning of 2024.
Despite varying production profiles across regions, the cumulative rainfall levels in 2023 partially offset the impact of lower rains in Q4, leading to an overall average year-end scenario. However, the focus now shifts to 2024, where January rainfall levels remained below average, echoing the challenges faced in 2021.
Figure 3: Cumulative Precipitation (mm) – Zona da Mata
Figure 4: Cumulative Precipitation (mm) – Espírito Santo
As the industry grapples with these weather-induced challenges, the market is marked by both bullish and bearish points. The warm and dry weather in Brazil during Q4/23, potential production reduction, as well as some demand markers analyzed in our previous reports contribute to a bullish sentiment. Still, the 24/25 crop in Brazil can surprise positively, according to each regions’ rainfall patterns throughout the year, and the recent recovery in the first weeks of January.
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