World coffee consumption rises 1.7%, but pace is slower – 7/5/2023 – Shuttle

World coffee consumption, after an increase of 4.7% in the 2021/22 harvest (October to September), slows down and will grow by 1.7% in 2022/23. According to the International Coffee Organization, 178.5 million bags will be consumed in the period.

The slower pace of the world economy and the strong acceleration of inflation are the main factors behind this slowdown. The biggest loss of rhythm occurs in non-coffee producing countries, mainly in Europe.

The Europeans, who had a 6% increase in consumption in the 2021/22 harvest, will maintain the same level in 2022/23, according to data released this Wednesday (5) by the ICO.

World production rises to 171.3 million bags in this harvest, 7.3 million less than consumption. In the last two harvests, production was 14 million bags below what was consumed.

In Brazil, 45% of coffee areas have already been harvested this year, a percentage above that of 2022, but below the average of the last five years, which is 48%.

The data are from Safras & Market, which estimates Brazilian production at 66.7 million bags. Arabica coffee harvest reaches 35%, and conilon, 62%.

With the advance of the domestic harvest, prices fall. Follow-up by Cepea (Center for Advanced Studies in Applied Economics) shows that a bag of arabica fell to R$826 at the end of June, down 17% in the month.

The good production in 2023/24 and favorable weather conditions made the average price of the Arabica type fall to the lowest monthly level since June 2021.

The price differential for arabica bag for conilon, which was R$ 509 in May 2022, fell to R$ 220 last month.

The decline in the values ​​of negotiations in the field reaches retail. Research by Fipe (Fundação Instituto de Pesquisas Econômicas) points to an accumulated drop of 4.2% in the prices of powdered coffee in supermarkets in São Paulo.

Ox The arroba of ox was high of 4.5% in June. Even so, last month’s closing price was 11.4% below that of December 29 last year. Since 2005, prices for the arroba do boi have not had such a sharp drop in the first half.

Wheat The selling price is the lowest since 2020. In Rio Grande do Sul, the June average was R$ 1,261 per ton, 41% lower than June 2022, according to Cepea.

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