August Coffee Exports Show Divergent Trends in Brazil and Vietnam
In August, Brazil’s green coffee exports increased by 4.86% compared to the same period last year, totaling 3,451,183 bags, according to preliminary data from the Brazilian government. The detailed breakdown of exports, expected soon, will likely reflect increases in Brazil Conilon exports, driven by rising demand despite ongoing logistical challenges. As the new crop harvest enters its second month, further insights are anticipated in the forthcoming monthly report.
In contrast, Vietnam’s coffee exports for August were down by 14.10% from the previous year, totaling 1,216,667 bags. The Vietnam Customs Authority initially estimated exports at 1.16 million bags for the month. For the coffee year spanning October 2023 to September 2024, Vietnam’s cumulative exports over the first eleven months have dropped by 12.71%, totaling 23,441,199 bags, reflecting reduced output and availability in the 2023/24 season. This shortfall has contributed to historic highs in the London robusta futures market. Despite lower export volumes, Vietnam’s coffee revenue for the first eight months of 2024 is up by 34.80% year-on-year, reaching approximately 4 billion USD.
The International Coffee Organization (ICO) has maintained its forecast for global coffee supply at 5.83% below last year’s level, totaling 178 million bags for the October 2023 to September 2024 coffee year. Global consumption is projected to rise by 2.25% to 177 million bags, driven by growing demand in emerging markets and increasing local consumption in producing countries such as Brazil, Indonesia, and Vietnam.
For July 2024, the ICO reported a 12.20% increase in global coffee exports compared to the same month last year, reaching 11.29 million bags. Over the first ten months of the current coffee year, total exports were 10.50% higher than the same period in the previous year, amounting to 115.01 million bags. This growth was largely fueled by a 26.00% increase in South American exports, with Brazil leading the charge, registering a 26.20% year-on-year increase in July, totaling 3.80 million bags.
Meanwhile, Asia saw an 8.10% drop in coffee exports for July, driven by a 29.10% decline in Vietnam’s shipments. In Africa, exports rose by 34.70% during the same month, with Ethiopia and Uganda contributing significantly. Ethiopia’s exports surged by 63.60%, while Uganda’s grew by 27.20%.
Central American countries and Mexico saw a 7.10% decline in exports for July compared to the same month last year, totaling 1.38 million bags.
Certified washed arabica stocks held by the New York exchange increased by 11,467 bags yesterday, reaching 834,792 bags, with 97.70% of these stocks held in Europe and 2.30% in the USA. Brazil accounts for 46.30% of these stocks, followed by Honduras at 12.40%. Meanwhile, pending grading stocks decreased by 14,689 bags, leaving 54,962 awaiting grading.
The arbitrage between November 2024 and December 2024 contracts for London robusta and New York arabica widened to 21.44 U.S. cents per pound, translating to an 8.78% price discount for London robusta coffee.
In commodity markets, oil prices firmed, and the New York arabica, cocoa, sugar, and metals markets posted gains. Conversely, the London robusta, corn, soybean, and wheat markets ended the day with losses. As of the start of the day, the U.S. dollar was trading at 1.318 against the British pound, 1.112 against the euro, and 5.568 against the Brazilian real.
The New York market opened under pressure, trailing the previous day’s performance, while the London market started slightly stronger. As the day progressed, the New York market gained momentum, driven by buying support, while the London market remained close to par. Both markets recovered from early losses, with New York finishing the day on a modestly firmer note, and London closing near unchanged, retaining just 2.50% of earlier losses.
