The USDA December biannual report lifted the world coffee production to 167.47 mln bags, up 1.6% from the June projection. With that, USDA reduced the decline to 5% from the 175.95 mln bags produced in the previous season. The 21/22 arabica production is projected at 77.86 mln bags, accounting for 53% of the world total. Arabica loses share since in the previous season it accounted for 58% of the total. Robusta reaches 77.89 mln bags, accounting for 47% of the total.
The upward adjustment in production associated with more modest consumption growth gives supply some relief, which explains the reversal from the deficit of 132,000 bags, estimated in the June report, to the surplus of 2.61 mln bags projected now in December. The slower consumption growth is still associated with the effects of the pandemic, such as falling incomes, global inflation, and rising coffee prices.
But exports are likely to drop due to the lower supply available because of the production losses of Brazil’s 2021 crop. In any case, USDA reduced the decline in the volume exported worldwide, betting on an improvement in the flow from 2022 as well as on purchases that replenish the stocks of global industries.
World stocks must decrease 17.4%, totaling 29.99 mln bags at the end of 21/22. In the scenario of greater difficulty in supply, industries were forced to shed their reserves to cover positions. Even so, out of this volume, approximately 19.5 mln bags (65%) will be stored in the main world importers: European Union (11.3 mln bags), United States (5.8), and Japan (2.4). The stock-consumption ratio at the end of the season falls to 18.2%.