Brazil and Vietnam reduce competitor space in coffee – 12/20/2023 – Vaivém

The leadership of Brazilians and Vietnamese in world coffee production is restricting the participation of other competitors in important markets such as the European Union.

According to the USDA (United States Department of Agriculture), the two countries have held a percentage of up to 58% of the market formed by the European bloc in the last ten years.

In the 2022/23 harvest, which began in October last year and ended in September this year, Brazil was responsible for 32% of the supply of coffee imported by the European Union. Vietnam provided 26%.

In this 2023/24 harvest, Europeans, the world’s main coffee importers, are expected to purchase 47 million bags, up from 44.5 million in the previous period.

The United States, in second place in the world, buys 24 million bags, a volume also higher than the previous harvest.

According to a market assessment released by USDA this Wednesday (20), world coffee exports rise to 142.2 million bags this harvest, 6% more.

World production, with the increase in the Brazilian harvest, reaches 171.4 million bags, 4% above the previous one. Consumption, with greater demand from the European Union, the United States, Japan and Brazil, rises to 169.5 million.

As a result, stocks drop to 26.5 million bags, the lowest level in 12 harvests, according to USDA.

Exports of soluble coffee fall to 17.1 million bags, down from 17.2 million in the previous harvest. Brazil, however, is gaining market share, increasing sales to the equivalent of 4.3 million bags, 10% more, in USDA’s assessment.

CLIMATE INTENSIFIES CRACK IN SOYBEANS

The 2023/24 soybean harvest, previously forecast at 160 million tons, is not expected to reach this level, in the assessment of Itaú BBA analysts.

Irregular rains and excessive heat are expected to reduce plant productivity in Mato Grosso, the country’s main producer, by 20%. As a result, national production would drop to 153 million tons.

This could be the main drop in productivity ever to occur in the state, which is expected to have production below 40 million tons.

These numbers change a lot of things in the country and abroad. World production, forecast at 400 million tons, drops to 391 million.

Brazilian exports, estimated at a volume of more than 100 million tons, should be between 95 million and 96 million.

The decline will have an impact on consumers, due to the rise in prices of grain and its derivatives, mainly soybean oil.

Rural producers who still have good production prospects will be able to earn more for the product. Those affected by the drought will lose income in a harvest year with high costs.

Brazil is the world’s largest producer and exporter of soybeans, the leading item in the national trade balance.

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