The USDA biannual report made important adjustments to world coffee production. First, it cut the 22/23 coffee harvest by 5.5 mln bags, due to lower production in Vietnam and Ethiopia due to the drought. And the reduction of 600 thousand bags in the Colombian crop due to damage caused by excessive rain. Effects of La Niña. Lower production ended up affecting the flow of shipments and led to a strong negative adjustment in stocks.
For the 23/24 crop (Jul/Jun), USDA reduced robusta production. Despite this, it still projects growth of 6.9 mln bags or 4.2% in global production, indicated in the current season at 171.4 mln bags. The increase in production in Brazil, Colombia, and Ethiopia, important origins of arabica, more than compensates for the decline in the Indonesian crop. Thus, arabica production rose to 97.3 mln bags, which corresponds to an increase of 11% compared to last season. Arabica coffee is recovering its share, accounting for nearly 57% of the total world coffee production, compared to 53% in the 22/23 cycle.
USDA corrected its export projection downward, which even so is expected to grow and reach 120 mln bags, driven by the greater volume of shipments from Brazil. World consumption should remain relatively stable, growing only 0.3%, at 169.50 mln bags. There was an improvement in consumption projections in the European Union, which rose to 43.13 mln bags. Even so, the increase is insufficient to change the projection of a 3% decline in coffee consumption in the main consuming region of the world in 23/24. In the USA, consumption was revised downward, projected at 25.48 mln bags. Despite the negative adjustment, it still sustains an increase of 3.5% compared to last season. In general terms, global coffee consumption is expected to move sideways, which raises a warning signal and reinforces structural problems in the coffee market, which has become quite evident in times of supply recovery.
Coffee stocks at the end of the 23/24 season are forecast to fall to the lowest level since the 11/12 season, largely due to the negative adjustment in production in the 22/23 season. Global stocks are estimated at 26.53 mln bags at the end of the 23/24 season, which corresponds to a stock-consumption ratio of only 16%. As a result, the global surplus is reduced to 1.93 mln bags, compared to 4.11 mln bags indicated in the June report.