With lower inflation, global coffee consumption rises again – 12/05/2023 – Vaivém

After the period of the most acute global inflation, coffee consumption will grow again by 2.2% in the 2023/24 harvest, rising to 177 million bags. This evolution will occur mainly in producing countries, which will increase demand by 2.6%.

In addition to a relief in inflation, the performance of the world economy, with growth forecast above 3%, will also help with this evolution of consumption. In the 2022/23 harvest, consumers held back, drinking 2% less.

The data is from the ICO (International Coffee Organization), released this Tuesday (5). Coffee production is forecast at 178 million bags, 5.8% more than in the previous harvest.

If production and consumption data are confirmed, the supply of coffee exceeds demand by 1 million bags. In the two previous harvests, there was a deficit of 13.5 million bags.

The recovery in production is due to both the increase in the supply of Arabica coffee, which is expected to reach 102.2 million bags, and the increase in the supply of Robusta, expected at 75.8 million. Arabica production grows by 9%, and Robusta production by 2%.

With the new numbers predicted for production, South America is left with 89.3 million bags, half of the world’s harvest. Asia, due to Vietnamese production, comes next with 49.9 million.

Consumption returns strongly in North America, with an expected increase of 3.8%, after a 5% drop in the previous year. Europe, which is the leader and consumes 54 million bags per year, will see growth of 1.1%, according to the ICO.

The 2023/24 harvest will have more adverse weather conditions, mainly due to El Niño. Vietnam benefits. It will be a dry and hot climate, but irrigation mitigates the reduction in rainfall.

The coffee area continues to expand, and new coffee plantations improve productivity. This is also increasing due to the good practices that have been adopted, according to ICO analysts.

AGRICULTURAL GDP MAINTAINS STRONG PACE

Agricultural GDP (Gross Domestic Product) accelerated by 8.8% in the third quarter of this year, compared to the same period in 2022. As a result, the sector’s accumulated GDP was 18.1% from January to September.

The increase in the last quarter was due to the good performance of corn, which registered production 19.5% above that of last year.

The IBGE also pointed out better performance in the sugar cane harvest (up 13.1%), cotton (12.5%) and coffee (6.9%). Orange (minus 7.3%) and wheat (-8.7%) performed worse.

GDP is on track to close the year with a growth rate exceeding double digits. In the last four quarters, in relation to the previous four, growth is 14.4%.

The IBGE reviewed the rates for the first two quarters, pointing to an even greater increase. The evolution in the first quarter was 22.9%; that of the second, 20.9%. Both are compared with the performance of the same period of the previous year.

GDP in the third quarter of this year, when compared to the second, shrank by 3.3%, according to IBGE.

Soy Itaú BBA forecasts 158 million tons of the oilseed in the 2023/24 harvest. This volume exceeds the previous volume by 2%.

Harvest worldwide With Argentina’s production returning to 48 million tons of soybeans, the world harvest is expected to reach 400 million. In the 2022/23 harvest, due to the climate, Argentines produced only 25 million.

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