Why Are Coffee Producing Countries Watching Brazil's Exports?

Brazil shipped 4.662 million bags of coffee in November, up 5.4% year on year, while export revenue jumped 62.7% to $1.343 billion on higher international prices. Cumulative exports for the first 11 months reached 46.399 million bags, surpassing the 2020 record, but volumes and revenue both fell from October as producers held back sales.

Port logistics bottlenecks and an indefinite strike by Federal Revenue Service customs auditors are adding cost and delay risk to the export chain. With drought affecting both Brazil and Vietnam and supply tightening, Arabica and Robusta futures keep climbing, so coffee producing countries and buyers alike expect prices to stay high in the short term.

According to the latest data from the Brazilian Coffee Exporters Council, Brazil's coffee exports reached 4.662 million bags in November, up 5.4% year-on-year, while export revenue surged 62.7% thanks to rising international prices. Cumulative exports for the first 11 months of the year have set a new historical record, but month-on-month figures declined, as producers slowed sales amid rising futures, exchange rate fluctuations, and uncertainty over the new crop season. At the same time, port logistics bottlenecks and an indefinite strike by Federal Revenue Service customs auditors are bringing additional costs and delay risks to the export chain. With both Brazil and Vietnam plagued by drought and global supply tightening, Arabica and Robusta futures continue to climb, and coffee prices are expected to remain high in the short term. Follow origin updates—Front Street Coffee will continue to bring you frontline news.

According to a recent report released by the Brazilian Coffee Exporters Council (Cecafé), Brazil shipped a total of 4.662 million bags of coffee (60 kg each) in November, up 5.4% from 4.422 million bags in the same period last year. The increase in export earnings was even more pronounced, jumping from $825 million last year to $1.343 billion, a surge of 62.7% year-on-year.

In the first five months of the 2024/25 crop season (July to November), Brazil's cumulative coffee shipments reached 22.017 million bags, with total export value of $5.955 billion, up 16.5% and 61.4% respectively compared with the same period of the previous crop season. In addition, total exports for the first 11 months of 2024 have climbed to 46.399 million bags, a figure not only 32.2% higher than the first 11 months of last year, but also surpassing the all-time high set in 2020 (44.707 million bags) by 3.78%.

Export revenue performed even more strikingly. Driven by the recent rise in international coffee prices, Brazil's cumulative foreign exchange earnings from coffee in the first 11 months of this year reached $11.302 billion, a sharp increase of 56% over the same period last year, and 22.3% higher than the peak of $9.244 billion set in 2022.

Although the November export report was generally positive, both export volume and revenue declined compared with October this year. This is mainly because rising international coffee futures prices, market concerns about the economy and the dollar's trajectory, and uncertainty over Brazil's next crop season have prompted producers to be more cautious when selling coffee, thereby slowing the pace of sales.

Another prominent challenge remains the logistics bottleneck at Brazilian ports. Some exporters have revealed that they have been trying alternatives, such as switching to bulk shipping, but due to inadequate infrastructure, exporters still bore more than a million dollars in additional costs in the process, pushing up operating costs.

To make matters worse, Brazil's coffee exports are currently also being hit by a port strike. At the end of November, customs auditors of Brazil's Federal Revenue Service launched an indefinite nationwide strike, demanding salary adjustments. So far, the strike has lasted more than a week with no sign of ending. The auditors' union, Sindifisco Nacional, said the strike will continue indefinitely.

It is understood that the trigger for this strike was the failure of the union and the federal government to reach consensus on position-based salary adjustments. Since July this year, the union has been organizing strikes and other actions, and this strike is the largest so far. However, the union stated that 30% of employees will remain on duty, and clearance for live animals, pharmaceuticals, hazardous materials, and food will not be interrupted.

However, shipping agents, importers, and agricultural commodity traders are all deeply worried about this round of strikes. The strike will cause customs clearance delays, interrupt audits and inspections, increase logistics costs, and disrupt operating schedules, ultimately affecting cargo transport at major Brazilian ports such as Santos.

The executive director of the São Paulo State Union of Maritime Navigation Agencies (Sindamar) warned that this will severely damage Brazil's economy. Due to customs clearance delays, goods are piling up at container terminals, container supply is becoming unbalanced, and ultimately Brazil's commodity exports will be dragged down. If the strike continues, storage fees, container demurrage charges, and equipment maintenance costs will all rise, and market competitiveness will decline; these additional costs may ultimately be passed on to consumers.

At present, although Brazil's coffee export volume remains high, Brazil and Vietnam, the two major coffee-producing countries, have both been hit by severe weather such as drought, and coffee output has fallen short of expectations, affecting the supply outlook for next year. As a result, Arabica and Robusta coffee futures prices have continued to rise recently. The current climate situation remains unstable, and Brazil has begun to slow exports due to issues such as prices, inventories, and currency exchange rates, so coffee prices will remain at a relatively high level in the short term.

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