Brazilian coffee exports, having ended 2021-22 on a high note, got the new season off to the slowest start in four years, undermined by a lagging harvest and strong domestic demand, as well as residual shipping hiccups.
Brazil shipped 2.17m bags of green coffee in July, the first month of the country’s 2022-23 coffee marketing year, exporters’ industry group Cecafe said.
That represented a 23% tumble from June shipments which were the highest for the month on data going back to 2010.
It was also 15.8% below the 2.58m bags shipped in July 2021 – and was indeed the lowest performance for any month since July 2018.
Last month’s slowdown reflected in part “the continuity of logistical bottlenecks” which have dogged world shippers for months, particularly in the market for container freight which is typically used to carry coffee.
“Despite a slight improvement, obstacles to global maritime trade still persist,” said Günter Häusler, the Cecafe president, noting the quest by merchants to find ways to overcome “the high freight costs and lower availability of containers.
“Last month, for example, there was another export via break bulk,” in which coffee bags are transported in a ship’s hold, rather than using containers.
However, Mr Häusler also noted “heated demand” by Brazilian roasters for robusta beans in particular.
Brazil’s robusta shipments last month, at 144,625 bags, tumbled by 65% year on year to their lowest since 2017.
Furthermore, supplies of beans from the 2022 crop were being squeezed by both a late start to harvest, and a reluctance by producers to sell.
“The harvest today is at a normal pace, but the delay that occurred in the previous months had a slight effect on exports,” he said.
Crop selling, meanwhile, had been slowed by “the recent strong fluctuations in prices, together with the continuity of the war and the uncertainties related to the global macroeconomy”, which had prompted producers to “analyse the best scenarios” for marketing their crop.
The slow pace of selling has been noted by observers including Cepea, which said last week that “the current high volatility of quotations,” combined with some production setbacks stemming from frost and drought last year, “are making farmers more cautious when selling the product in both the spot and the future markets.
“Thus, domestic liquidity in July was lower than that in the same period of previous years.”
Consultancy Safras e Mercado also on Friday reported below-average levels of coffee being offered in Brazil’s physical market in Brazil, particularly of arabica beans.
Safras e Mercado reported the harvest at 83% complete as of August 2, closing the gap on the five-year average of 86% after a slow start the consultancy attributed to an uneven pace of crop maturation, making harvesting difficult, and to shortages of labour in some areas.