
Mar 15
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Natália Gandolphi
Coffee Weekly Report - 2024 03 15
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- The La Niña event is expected to impact coffee-producing regions globally once again, with the event likely to become active towards the end of the second quarter, according to CPC’s last update.
- In Brazil's Southeast, lower temperatures and increased frost risks threaten coffee crops. Indonesia may experience delayed or disrupted harvests due to heavier rains, especially in Sumatra.
- Vietnam faces negative temperature anomalies during the phenomenon, but its impact on yields remains uncertain. In Colombia and Guatemala, heavier rains may damage trees or increase disease susceptibility. Additionally, Central American countries face heightened risks of tropical storms and hurricanes during La Niña episodes.
- While historical data suggests correlations between the phenomenon and yield fluctuations, attributing yield reductions solely to La Niña is challenging due to other influencing factors. Overall, the event presents diverse risks across coffee-producing regions, underscoring the need for careful monitoring and adaptation strategies within the industry.
La Niña likelihood increases – what are the risks?
Last Thursday (14), the Climate Prediction Center in the United States released the latest update regarding the possibility of La Niña developing in the second quarter.
The upcoming La Niña event is expected to persist into the Southern Hemisphere winter, impacting various coffee-producing regions globally. Brazil's coffee crop, particularly in the Southeast, faces risks of lower temperatures and increased frost occurrences due to the phenomenon's influence. Historical data shows that the event during vegetative development phases correlates with decreased yields, such as the 21/22 season witnessing a 19% drop compared to the previous cycle.
In recent years, the phenomenon has been either active or on watch during the June-August quarter, coinciding with the vegetative development of subsequent crops in Brazil. During these periods, three out of four occurrences saw decreased yields, indicating a potential link between La Niña and production declines. Notably, the 21/22 season experienced a significant yield reduction attributed to the event’s influence.
In Indonesia, where coffee harvest spans from April to September, the phenomenon may bring heavier rains, particularly affecting regions like Sumatra. This increased precipitation could disrupt or delay the harvest, as observed in past occurrences where yield reductions were not solely attributed to La Niña but also to other one-off conditions during development.
Figure 1: ENSO Status (ONI Index)

Source: IRI
Figure 2: Crop Calendar

Source: hEDGEpoint
Vietnam experiences negative temperature anomalies during La Niña, potentially impacting coffee yields. However, historical data suggests that La Niña's influence on yields remains unclear, with no significant disruption observed in past occurrences. Despite experiencing negative temperature anomalies, Vietnam's yields have either remained unchanged or increased in three out of the four occurrences, indicating a limited impact of La Niña on production – in the year-over-year comparison, which depends heavily on one-off factors. Otherwise, La Niña has capped growth against the trendline (total potential), which demands attention.
In contrast, Colombia and Guatemala anticipate heavier rains during La Niña, which could lead to tree damage or increased disease susceptibility. Although increased precipitation during La Niña might seem beneficial for crop development, excessive rainfall, reaching up to 600% of normal levels, poses risks to coffee trees and creates an environment conducive to diseases. Additionally, Central American countries face higher risks of tropical storms and hurricanes during La Niña episodes, further impacting crop yields.
Figure 3: Coffee Yields – Brazil and Vietnam (bags/ha)

Source: USDA, Conab, IRI
In Summary
Overall, the La Niña event poses challenges for coffee producers worldwide, from damages in Brazil to delayed harvests in Indonesia and heightened precipitation in Colombia and Guatemala. While the market closely monitors La Niña's effects on coffee production, accurately predicting its impact remains challenging due to the interplay of various factors influencing crop yields – however, based on records from recent years, the phenomenon could present itself as a bullish factor, if it becomes active during key moments of development from the second quarter onwards.
Weekly Report — Coffee
Written by Natália Gandolphi
natalia.gandolphi@hedgepointglobal.com
natalia.gandolphi@hedgepointglobal.com
Reviewed by Pedro Schicchi
pedro.schicchi@hedgepointglobal.com
www.hedgepointglobal.com
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