The Brazilian coffee industry anticipates a fruitful 2024/25 market year, buoyed by favorable weather conditions and increased global demand driven by production shortfalls in key coffee-producing nations like Vietnam. Projections from the USDA Foreign Agriculture Service’s annual report shed light on the sector’s prospects.
Production Outlook
Expectations point to a robust production surge in Brazil, with estimates indicating a 5.4% rise to 69.9 million 60-kilogram bags for the 2024/25 marketing year. Notably, Arabica coffee production is poised to escalate by 7.3% to 48.2 million bags, while robusta production is forecasted to reach 21.7 million bags, marking a 1.4% increase. However, conflicting figures from Brazilian agricultural agencies CONAB and IBGE suggest a degree of uncertainty, with harvest estimates ranging from 58.8 million to 60.2 million bags.
Infrastructure Challenges
The Brazilian coffee export sector confronts significant logistical hurdles, as evidenced by the staggering 81% of delayed shipments at main ports in March 2024. Reports from the Brazilian exporters association CECAFE highlight constraints at key terminals like the Port of Santos, with delays extending up to 39 days. Limited gate access exacerbates planning woes, resulting in elevated costs for exporters and heightened risks of missing international deadlines. Furthermore, labor shortages for manual harvesting compel farmers to commence harvesting prematurely or prioritize certain crop segments.
Exports and Revenue Growth
Brazil, a global leader in arabica coffee production and the second-largest robusta producer, stands to benefit from heightened demand amid supply disruptions in Vietnam and Red Sea trade disruptions. Projections from the Brazilian Ministry of Agriculture indicate a substantial revenue uptick, with the 2024 coffee harvest expected to yield approximately US$10.7 billion, a 17% surge from 2023 levels. Notably, arabica coffee is set to account for 72% of this revenue, with robusta contributing 28%, fueled by favorable weather conditions in Brazil.
Export Trends and Consumption Patterns
Export data underscores Brazil’s pivotal role in global coffee markets, with a 16% increase in imports from coffee-producing nations in 2023. Notable spikes in Brazilian coffee imports by Vietnam (212% increase) and Indonesia (119% increase) in early 2024 underscore the nation’s growing prominence. Specialty coffee exports witnessed a remarkable 45% surge in the first two months of 2024, amounting to 1.57 million bags and generating $356.9 million, with the United States emerging as the top destination.
On the domestic front, Brazil’s coffee consumption is on an upward trajectory, forecasted to reach 22.67 million bags in 2024/25. Analysts suggest that domestic consumption accounts for nearly 40% of total Brazilian coffee production. Roasted and ground coffee dominate the market, comprising 95% of consumption, while soluble coffee consumption has steadily risen since 2016, hitting a record 1.05 million bags in 2023.
With favorable market conditions and rising global demand, Brazil’s coffee sector appears poised for continued growth in the coming year, bolstering its position as a key player in the international coffee landscape.