Global coffee supply is expected to swing to a surplus in 2023-24 from a deficit as production expands in countries including Brazil.
Steve Wateridge, Head of Research at Mintec’s Tropical Research Services, attended the 27th Asia International Coffee Conference in Saigon last week, and presented exclusive coffee insights to procurement professionals.
Key Takeways From Coffee Supply & Demand Trends
Global production in 2023-24 forecast to increase to 177.6m bags from 167.1m bags.
Brazil
Brazilian output projected at 70.3m bags and 73.1m bags in 2023-24 and 2024-25, respectively, from 63.7m bags in 2022-23.
Vietnam
Vietnam’s output seen falling to 29.2m bags in 2023-24, from 29.6m bags in 2022-23; may rebound to 31m bags in 2024-25 season, weather permitting.
Consumption trends
Global consumption forecast to rise 1.5% y/y to 175.9 million bags. Robusta consumption rose 10% in 2022-23, while arabica fell 7%. Low arabica output in Brazil and Colombia over the past two seasons has helped underpin the shift in consumption.
Price expectations:
Global output may climb to 187.3m bags in 2024-25 under normal weather conditions; prices may fall to the cost of production on higher supply, with farmers currently investing in future output. The price difference between arabica and robusta during the current season is less than in the previous season.
Arabica Futures Prices - 1980 to 2023
- Severe frost in Brazil
- Drought in Brazil
- Collapse of International Coffee Agreement
- Devastating frost in Brazil
- Drought in Brazil & record low certified stocks
- Arabica and Robusta react to high prices leading to severe over-supply, on account of super crops in Brazil & Vietnam
- Low prices stimulate demand and curb production
- Roya hits Colombia leading to shortage of mild Arabica coffee
- Arabica reacts to high prices by switching consumption to Robusta as Colombian crop recovers and Brazil responds to price stimulus
- Worst drought in 70 years hits Brazil Arabica crop
- Worst drought in 130 years hits Brazil Robusta crop
- High prices needed to encourage stock draw in Brazil, but function performed by exchange rate move, so $ price declines
- Prolonged drought in Brazil followed by two moderate frosts
Source: Steve Wateridge - Mintec's Tropical Research Services
To explore the supply & demand dynamics, and unlock production forecasts giving you competitive edge in coffee markets, get in touch with Mintec's Tropical Research Services experts at info@tropicalresearchservices.com.
