Brazil’s robusta coffee export prices soared to a five-year high in November as producers, concerned over 2023 prospects, stepped back from sales, allowing exports to dive below 100,000 bags.

Robusta supplies achieved $162.48 per bag last month in Brazil, up by 1.3% month on month and by 27% year on year, to achieve the highest price achieved since May 2017, data from coffee export industry group Cecafe showed.

The rise contrasted with a 1.1% fall in November in prices of arabica coffee exports, to $247.54 per bag, narrowing the robusta discount to a 10-month low.

And it came amid growing worries over 2023 prospects for Brazil’s robusta crop in particular, thanks to weather setbacks including a lack of rainfall in Espirito Santo, the top growing state, and high temperatures in Rondonia.

‘Water stress and intense winds’

Research institute Cepea last week reported that “coffee growers in Espírito Santo are concerned about their crops.

“With the water stress and intense winds reported in past months, the defoliation of the coffee plantations occurred intensely, causing, in November, problems in the setting of the flowers,” to form the cherries to be harvested next year.

In Rondonia, while plantations received rain relief last month, “producers remain attentive to the high rate of abortion” of coffee tree flowers, Cepea said.

Coffee analyst Maja Wallengren also warned earlier this month, following a Brazil plantation tour, that the country’s 2023 robusta harvest “will cause a major negative surprise to the world coffee market”, saying that there was “an extremely poor crop in development”.

“The negative impact of multiple weather disturbances from late May through November is of such magnitude that it’s comparative to the big drought in 2014-15 which saw production in Espirito Santo cut short by a third,” she said.

Robusta vs arabica

The concerns have come even as buyers have shown a “greater presence” in the Brazilian market, with an “increased interest in the variety for use in blends”.

However, producers, “aware of this scenario, are moving away from negotiations,” in anticipation of higher prices.

Cepea reported domestic Brazilian robusta coffee prices on Monday hitting a two-month high of R$683.75 per bag – taking gains for December to 12.1%, compared with a 1.3% increase to R$1,016.22 per bag in prices of arabica beans.

The discount of robusta beans to arabica ones on Friday touched a 14-month low of R$304.48 per bag.

‘Strong domestic demand’

In Brazil’s export market, Cecafe – which reported “strong demand from the domestic industry” for robusta beans, which are used largely in making soluble coffee – reported shipments last month dwindling to 98,955 bags, a dip of 12.0% month on month and of 55% year on year.

It also represented the first month since May 2018 in which exports have fallen below 100,000 bags.

Arabica exports, by contrast, expanded last month by 5.0% month on month, and 25% year on year, to 3.30m bags, the best performance since February 2021.

Brazil’s overall coffee exports, at 3.67m bags, rose by 3.4% month on month, and by 14.3% from November 2021.

European demand

By destination, the European Union has increased its share of Brazil’s coffee exports so far in 2022, to 49.7%, from 45.3% in the same period of last year.

Certified arabica stocks held for delivery against Ice futures rose by 54% last month to 591,769 bags, led by a 53% surge to 352,553 bags in Brazilian origin.

The volumes held in European, rather than US, warehouses soared by 63% to 539,806 bags.