USDA Report: Global Coffee Production 2023/24

The USDA's latest report puts global coffee production for 2023/24 at about 171.4 million bags, a modest rise from the previous season. Brazil is expected to recover after a smaller crop, helped by better weather in arabica growing regions. Colombia is also seen rebounding, with higher arabica coffee output than the year before. These gains offset losses in other origins and keep total supply roughly in line with demand.

Vietnam and Indonesia face pressure from dry conditions and lower robusta yields, which has pushed robusta prices higher. The report notes that ending stocks remain tight, so any weather shock in a major origin could move the market. For roasters, the takeaway is that arabica supply looks more comfortable, while robusta remains the tighter side of the balance sheet through the current crop year.

As the year draws to a close, coffee organizations and importers in multiple countries have been releasing annual reports. The Russia-Ukraine conflict, the Israel-Palestine situation, and inflationary pressures have dampened coffee consumption in some regions, while high interest rates have driven up trade costs. The EU Deforestation Regulation (EUDR) is expected to further increase coffee trade expenses in 2024. On the weather front, El Niño's dissipation may be delayed until the second quarter of 2024, posing a threat to producing regions along the equator that flower in April-May, with Brazilian Robusta particularly affected, driving bean prices higher. The United States Department of Agriculture (USDA) recently released its "Coffee: World Markets and Trade" report, forecasting global production of 171.4 million bags in 2023/24, an increase of 6.9 million bags year-on-year; exports are projected at 119.9 million bags, up 8.4 million bags; consumption will hit a record high of 169.5 million bags, while ending stocks remain at a 12-year low of 26.5 million bags.

As the year draws to a close, several coffee importing and producing countries have successively published their 2023 annual reports. These reports generally point out that the Russia-Ukraine war and the Israel-Palestine conflict have led to declining coffee consumption in some regions, and inflation has likewise suppressed demand. At the same time, higher interest rates this year have pushed up trade costs, and the EU Deforestation Regulation (EUDR) is expected to bring additional expenses to coffee trade in 2024.

On the weather front, El Niño was previously expected to wind down in the first quarter, but it now appears it will extend into the second quarter of 2024. This significantly affects many coffee-producing countries located along the equator that flower in April-May, with Robusta-producing regions particularly impacted and Brazil bearing the brunt, as Robusta coffee bean prices have already been driven higher.

Recently, the United States Department of Agriculture (USDA) released its "Coffee: World Markets and Trade" report. According to the report, global coffee production for 2023/24 is estimated at 171.4 million bags, an increase of 6.9 million bags compared to the previous year. Global production is mainly driven by Brazil, Colombia, and Ethiopia, offsetting Indonesia's reduced output. Global coffee bean exports are projected at 119.9 million bags, also up 8.4 million bags from the previous year. With global coffee consumption expected to reach a record 169.5 million bags, ending stocks remain at a 12-year low of 26.5 million bags.

Brazil

Having earlier been affected by drought and other severe weather, production has now recovered to previous levels. Coffee production for 2023/24 is estimated at 66.3 million bags in total, an increase of 3.7 million bags from the previous year. Arabica coffee production increased by 5.1 million bags to 44.9 million bags, while Robusta coffee production will decrease by 1.4 million bags to 21.4 million bags. Coffee bean exports are projected to increase by 7.3 million bags to 39.5 million bags.

Colombia

Production is recovering, causing premiums to fall. Coffee production for 2023/24 is estimated to increase by 800,000 bags to 11.5 million bags. However, due to the sharp rise in fertilizer prices, Colombia's coffee production is 15% below its production potential. Exports are projected to increase by 1.2 million bags to 10.8 million bags.

Vietnam

The 2024 coffee production remains uncertain, depending on two key time points in January and April. Production for 2023/24 is estimated to increase by 300,000 bags to 27.5 million bags, with 95% still being Robusta. As last year's reduced output depleted inventories, part of this year's production will be used to replenish stocks, and exports are projected to decrease by 2.4 million bags to 23 million bags.

Indonesia

El Niño will damage Indonesia's coffee production in 2023/24. Production for 2023/24 is estimated to decrease by 2.2 million bags to 9.7 million bags. Among this, Robusta production decreased by 2.1 million bags to 8.4 million bags, and Arabica coffee production decreased by 100,000 bags to 1.3 million bags. Exports also decreased by 2.7 million bags to 5 million bags.

Note: Each bag is 60 kg

The above content is compiled by CoffeeHunters, a coffee news website.