STiR coffee and tea magazine

STiR coffee and tea 11 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Balance Production Consumption ICO - Summary World Coffee Market - Million 60-Kg Bags Production of Coffee - Regions, Percent Shares Africa South America Asia & Oceania Caribbean Central America & Mexico Inner Ring - 2021/22 Outer Ring - 2022/23 180 178 176 174 172 170 168 166 164 162 160 2.0 0.0 -2.0 -4.0 -6.0 -8.0 -10.0 Production & Consumption, Million 60-kg Bags Balance, Million 60-kg Bags 29.6% 31.1% 11.5% 10.6% 46.2% 48.3% 11.2% 11.4% end consumer the ability to drink more coffee for a fixed price, a development that "may contribute to a growth in consumption." EU imports of roasted coffee totaled just 1.4 million bags in 2022/23, down from a record 2.1 million bags four years earlier on reduced imports from Switzerland. Top suppliers included Switzerland (77%) and the United Kingdom (13%). Because coffee beans lose flavor and aroma shortly after being roasted, these imports are mostly limited to neighboring non-producing countries. ICO writes, "There was a large drawdown of stocks with combined stocks reported by the European Coffee Federation, and those held at the Intercontinental Exchange's warehouses in the USA fell by 4.8 million bags from 14.5 million to 9.8 million. This drawdown would have reduced the need for purchases on the interna- tional market, seemingly reflected in lower and anomalous global consumption rates for coffee year 2022/23. EU green coffee imports are forecast to rebound slightly in 2023/24 to 47 million bags primarily due to stronger shipments from Brazil, while roasted and soluble coffee imports remain flat at 1.4 million bags and 3.7 million bags, respectively, according to USDA. Brazil is still recovering Arabica trees in many growing regions continue to recover from a killing frost in 2021, followed by unusually high temperatures and below-average rainfall, but 2023/24 "is anticipated to be an exceptional off-biennial year." USDA forecasts Brazil's coffee production to increase by 3.7 million bags to 66.3 million in 2023/24. Arabica output will improve by 5.1 million bags to 44.9 million. "Following six years of expansion, the robusta harvest is forecast to decline by 1.4 million bags to 21.4 million as reduced precipitation and cooler temperatures leading up to the flowering stage lowered yields in Espirito Santo, where the vast majority is grown," writes USDA. ICO notes that economic conditions in Central and South America are improving (excluding Argentina and Venezuela), "South America successfully steered monetary policy to drop inflation from 7.8% to 5% in 2023. However, reducing inflation has hampered economic growth. This comes in addition to a weakening international environment, where demand for key exports and services is reduced, and a slowdown in growth from Brazil's main trading partners." Here is a quick assessment of the top producers not detailed above: Vietnam – The world's second-largest coffee producer experienced a 9.8% decline last year to 29.2 million bags, down 3.7 million bags and well below the recent year's record of 33.4 million bags in 2017. Vietnam is expected to benefit from the drier/hotter weather as irrigation mitigates the reduced precipi- tation. Exports, however, are forecast to decline by 2.4 million bags to 23 million, according to USDA. Colombia – Persistent unfavorable weather led to a 9.1% decrease in 2022/23, the third consecutive year of negative growth. Arabica production is forecast to go up by 800,000 bags to 11.5 million on slightly higher yields. However, yields remain nearly 15 percent below normal because growers limited fertilizer use due to high prices. Bean exports, mainly to the United States and EU, are forecast to be up to 1.2 million bags to 10.8 million on strong demand. Kenya – Arabica output decreased for the second year; production is under 1 million bags with coffee berry disease in the Central Highlands. Locally, consumer demand is increasing at a combined annual growth rate of 12%, according to Statista. Kenya is investing in value addition in the coffee sector and hopes to export coffee within a 54 -national trade block (AfCFTA). Indonesia – New acreage under coffee led to a net gain of 2.4% to 12 million bags, but the average yield from old-growth trees declined. Indonesia cultivated an additional 71,000 hectares of coffee in 2022/23. The anticipated El Niño weather event is set to dampen the outlook in Asia, especially in Indonesia. Honduras – Production increased by 14.7% to 5.7 million bags but is experiencing labor shortages, a resur- gence of coffee leaf rust disease, and high input costs that will dampen production in 2023/24. Neighboring Guatemala is down 7.4% -- its second yearly decline. India – South India's Karnataka experienced heavy monsoon rains, leading the Coffee Board to revise downward a harvest an early-year estimate of more than 6.6 million bags. India ended the year producing 5.9 million bags, up 2.9% compared to 2021/22. Robusta production is expected to rise by 300,000 bags to 4.5 million on slightly higher yields. See: Indian Coffee Enjoys a Year of Respite, see page 36. By Dan Bolton Source: International Coffee Organization | December 2023 Coffee Report & Outlook. Coffee Report

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