Welcome to our September edition of Market Watch! Andrew Blyth & Tom McLaughlin are here to provide you with the latest insight into Brazil exports, new market prices, and more as of September 2023.

Brazil Exports on the Rise

On September 29th, coffee futures prices traded to 8 1/2 month lows. As the recent Brazil harvest comes to an end, exports from the world’s largest coffee producer are constantly increasing. In fact, Cecafe reported that August Brazil coffee exports were 3,672,614 bags, which was 29% higher y/y from the August ’22 number of 2,837,781. Interestingly, the robusta export number was almost 700,000 bags, a record export number for any given month in Brazil. With September having come to an end, data from Cecafe indicates the month’s exports may mirror August’s numbers.

CONAB, a Brazilian government agency recently reported its estimate for the Brazil crop that was just harvest. The total crop number of 54.361 million bags is much lower than other industry estimates (USDA predicts 66 million). While this number appears low, it is still higher from the 2022/23 final number of 50.92 million bags. There were some concerns earlier in the month that flowering for Brazil’s next crop (2024/25) could be impacted by the above average temperature and dry weather from the past few months. Since traders saw this as an opportunity to push prices higher, Futures prices jumped up to $1.6450/lb on September 19th. Unsurprisingly, prices dropped nearly 20 cents lower as the coffee growing region received some much needed rain, and forecasts predict even more on the way!

What does this mean for you?

With high interest rates, a sluggish economy, and geopolitical concerns being front and center, coffee demand may be impacted. Even so, the specialty coffee world continues to see strong demand. Maybe coffee will once again prove to be the affordable luxury that sustains its demand in the face of economic challenges! We believe it will, and we also recommend covering all your anticipated coffee needs for 2023 and 2024’s Q1 at the very least.

If you’re looking for help determining the right volume and coffee types to secure, then give us a call! We can walk you through our helpful forecasting tools. Coffee is less expensive for roasters today than it’s been in months, and in some cases, years. Since the holiday season is just getting started, this is a great time to plan, sample, and reserve. Central American coffees will soon wind down, and fresh crop Indonesians are arriving weekly, so get them while you can!

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