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Origin Report - Brazil

Our June Origin Report features Brazil as the harvest is beginning across the country’s coffeelands. Projections suggest a good harvest volume this year, going against the country’s usual biennial cycle, and early reports from some of our producer partners indicate that many are anticipating a year of high quality lots. Globally, the C Market has maintained a relatively narrow trading range with few outliers, certified stocks of Arabica coffee continue to decrease, and production and consumption projections anticipate another multi-million bag deficit for coffee year 2022/23. Read on for updates from origin and facts and figures from around the industry.

The World Market

C-Market Analysis

C Market candlestick chartSource: Tradingview

Since our last report, the C Market has continued trading in a relatively narrow price range of $1.77–$1.85, with a single outlier day on June 8 on which the market reached nearly $1.95 / lb. Though the market maintained a support level of $1.82 / lb throughout most of May, that price appears to be acting more as a resistance line since May 26 when the market closed below $1.82 for the first time since April 10. At the time of writing (June 13), the market sits at $1.7870 / lb, a 21.28% decrease from this time last year.

Global Coffee Industry Statistics

ICO Composite Indicator Price graphSourced from the International Coffee Organization unless otherwise noted. Read their full May 2023 Coffee Market Report here.

  • The ICO Composite Indicator Price (I-CIP) lost 1.7% from April 2023 to May 2023, averaging 175.48 US cents/lb for the latter, whilst posting a median value of 176.70 US cents/lb.b.
  • Average prices for all group indicators decreased in May 2023, with the Robustas being an exception and gaining 5.9% averaging 122.55 US cents/lb
  • Intra-day volatility of the I-CIP is stabilizing, having reached 8.6% with a marginal decrease of 0.1 percentage points between April and May 2023
  • The New York certified stocks decreased 11.2% from the previous month, closing in at 0.66 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.39 million 60-kg bags, representing an increase of 5.9%.
  • In April 2023, South America’s exports of all forms of coffee decreased by 6.4% to 3.57 million bags, driven by the three main origins of the region, Brazil, Colombia, and Peru, which saw their combined exports fall by 17.9%.
  • World coffee production decreased by 1.4%, year-on-year, to 168.5 million bags in coffee year 2021/22; however, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23. World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22. It is expected to increase by 1.7% to 178.5 million bags in coffee year 2022/23.
    • As a result, the world coffee market is expected to undergo another year of deficit, with an estimated shortfall of 7.3 million bags in coffee year 2022/23.

ICO Certified stocks graph

At Origin

Harvest in Numbers and Statistics

Harvest time has arrived in Brazil, and producers throughout the country are preparing their facilities for incoming cherries or have already begun the post-harvest processing for their first lots of the season. This year, the USDA is estimating 44.7 million bags of Arabica production and 21.7 million bags of Robusta, representing a 12% increase and 5% decrease in production volumes respectively compared to the previous year. Export volume projections for coffee year 2023/24 have increased noticeably with 45.35 million bags estimated for export, a 26% increase over 2022/23.

Interestingly, this year should be a lower production year in Brazil’s biennial cycle—a two year cycle consisting of one year of higher production and one year of lower production typically. However, that cycle was impacted by the severe frosts in Brazil in 2021. With high production expectations this year, there is hope that the biennial cycle will return to normal next year if the climate conditions are favorable, giving Brazilian producers back-to-back years of above average production.

Coffee Buyer Amanda Oliveira (right) with Maria Gabriela Baracat Sanchez at Fazenda Dois Irmãos in Cerrado Mineiro, Brazil.Coffee Buyer Amanda Oliveira (right) with Maria Gabriela Baracat Sanchez at Fazenda Dois Irmãos in Cerrado Mineiro, Brazil.

In the Cerrado Mineiro region, home to some of the country’s largest and best recognized estates, harvest began in mid-May. On June 1, Coffee Buyer Amanda Oliveira visited producer Maria Gabriela Baracat Sanchez at Fazenda Dois Irmãos in Cerrado Mineiro along with EU Sales Manager Cristiano Mourão. Coffee was already drying on the patio, and Maria Gabriela told us that she’s expecting high quality lots from this year’s harvest.

In Sul de Minas the harvest typically begins a bit later in the season though some farms have already started picking cherries, particularly the farms that opt for a manual harvest. Expectations for quality are high throughout the region as the first lots are already cupping well during assessment.

Freshly harvested yellow coffee cherriesHarvest time at Fazenda Minamihara in Alta Mogiana, Brazil.

The Montanhas do Espírito Santo coffee region is another area that typically begins their harvest later in the year, but due to lower temperatures and a long period of drought last year some farms have already started their selective harvesting process. The climate has remained dry and relatively cold, which should provide good drying conditions for the region’s producers, many of whom utilize Washed processing. Some farms in the region also saw a strong flowering period late in the season in March, which should result in some microlots that will be harvested in November and December.

The Caparaó, Alta Mogiana, and Norte de Minas regions are all just beginning or are about to begin their harvests as well. Though there aren’t many reports yet from our producing partners in these regions, most indications point to good volumes and quality due to good climate conditions facilitating even maturation for the regions’ coffee cherries.

Ally Coffee in Brazil

In early June we sent members of our team to join people from our sister companies Cafebras and Atlantica for a series of cuppings, calibration, and educational sessions in Brazil. “It's a great opportunity for all of us at Ally, which is a global company spread out from origin to consuming countries, to come together to visualize and equalize our perception of coffee, therefore providing more value to producers and to roasters around the world,” said Tercio Borba, Sales Manager for Oceania & Asia. Calibration sessions like these are a critical part of staying connected with our team members around the world, and we look forward to continuing to use these opportunities for ongoing education and teamwork as a chance to seek new ways to move coffee forward.

Ally team members cupping coffeeScenes from our recent cupping and calibration with Cafebras and Atlantica. Pictured: Ricardo Pereira, COO (top left); Carol Tudela, Analyst of People and Management (top right); Bram De Hoog, Specialty Sourcing Manager (bottom left)

This time of year is always a busy period for our team in Brazil, as Coffee Buyer Amanda Oliveira travels to visit our producer partners throughout the country to cup coffees and select lots for roasters around the world. Sample availability will be in full swing in August after producers have had time to harvest, process, dry, and mill their lots. However, Amanda tells us, “Here at origin we are already working with customers and producers, taking note of all selection requests, [including] specific coffee profiles and farms.” If you haven’t already, now is the time to connect with your account manager to discuss your Brazilian coffee needs for the coming year.

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