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BRAZIL COFFEE EXPORT REVENUE RISES THANKS TO WEAK REAL

Brazilian coffee export revenue increased by 28.2pc in the January-June period, thanks to a weaker Brazilian Real that has made its commodities more competitive.

According to data from Brazilian Council Exporters of Coffee (Cecafé), coffee sales volumes increased by just 0.3pc in the first half of 2020.

Exports were also boosted by a decline in production in Vietnam, where lower rainfall and higher-than-average temperatures caused concerns about reduced production on lower yields.

The US Department of Agriculture (USDA) forecasts Vietnam’s coffee production year for season 2020/21 at 30.2mn 60kg bags, by 3.5pc down from the last year.

According to Cecafé data, although Brazil’s robusta coffee production is considered lower-quality than arabica, it filled the gap in the global coffee market left by Vietnam, with robusta exports up by 30pc in January-June.

Total exports, which includes industrialized coffee and arabica production, decreased by 4pc in the same period.

According to USDA data, Brazil produced 59.3mn bags of coffee through June 2020. For the next season, they forecast a record of 67.9mn bags.

Good weather conditions have generally prevailed in most Brazilian coffee regions, supporting fruit setting, development and filling, thus resulting in higher likely yields.

Prices in the domestic market remained steady this year as demand for exports has grown. Brazil’s domestic coffee consumption for 2020/21 is expected to be unchanged at 23.5mn bags — 22.4mn bags of roast/ground and 1.2mn bags of soluble coffee, compared to the last market year.

The Brazilian Coffee Industry Association (Abic) expects an increase in consumption in Brazilian households. It should offset the losses in “out of home” consumption with the temporary closure of Brazilian coffee shops, hotels, bars and restaurants imposed due to the COVID-19 pandemic.

Written by kristina

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