With the decrease in the Brazilian crop and reduced stocks at the end of the 23/24 season, due to record exports, the coffee supply for the 24/25 season, which begins this month of July, became smaller. Brazil exported more than 43 mln bags of coffee in the 23/24 season (Jul/Jun), with 19% of this total corresponding to robusta coffee, according to Cecafé. The global shortage of robusta, given the smaller crops in Vietnam and logistical problems between Asia and Europe due to the conflict in the Red Sea, boosted demand for Brazilian coffee, resulting in a higher-than-expected export volume. The fact is that higher-than-expected exports helped to empty warehouses and reduce stocks to just over 3 mln bags, which corresponds to half the volume that existed in warehouses at the beginning of the season. The significant cut in stocks, combined with a smaller-than-expected crop, results in a 4% lower coffee supply compared to the previous cycle.
The reduced availability directly impacts Brazil’s trade flow, resulting in a smaller exportable balance, with shipments expected to fall to 44 mln bags, down 7% from the previous season. Green coffee shipments are expected to reach 40 mln bags, well below the 43 mln bags shipped in the 23/24 season. Despite the reduction in exports, stocks are expected to fall again, squeezing the stock-consumption ratio to only 15%. This more restrictive supply scenario justifies an increase in the market balance price.