Brazilian coffee production ranks first in the world. Brazilian coffee production has declined and prices have risen.

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Brazilian coffee exports from Brazil, the world's largest coffee producer, are also on a downward trend.

According to the Brazilian Association of Coffee exporters (Cecafe), Brazil exported 2.6 million bags of coffee (60 kg per bag) in May, down 20.3% from a year earlier.

Exports of Arabica coffee beans, which are favored by boutique cafes and premium brands, fell 16 per cent to 2.05 million bags, while exports of Robusta beans, which are widely used to make instant coffee, fell 40.9 per cent from the same period a year ago. to 287,627 bags.

The Brazilian Association of Coffee exporters (Cecafe) also said that exports of coffee powder, cooked beans and instant coffee fell 18.5 percent to 275,111 bags.

There were two main reasons for the decline in coffee exports in May: a shortage of ① containers and limited space for ② ships.

Nowadays, a large number of containers around the world are stranded in Asia and the United States, resulting in a global shortage of available containers.

A new COVID-19 outbreak in southern China has curbed business activity and forced business to slow. There have been delays, congestion and container shortages at ports and terminals in southern China. Some ships even incur huge demurrage due to congestion outside the port for as long as a month.

The Wall Street Journal reported in May 2021 that as the US economy began to wake up from the COVID-19 epidemic last year, consumer demand began to improve, and enterprises began to replenish their inventories on a large scale, resulting in shipping delays around the world. as a result, shipping capacity is constrained and there is a greater shortage of shipping containers needed to transport goods.

According to data provided by Brazil's local Safras & Mercado industry consultancy, due to drought in the first few months of 2021, it is estimated that Brazil produced 5, 6.5 million bags in the 22nd year, down 18.8 per cent from 6, 9.6 million bags the previous year.

On the whole, the situation in 21Zip 22 is a serious shortage of supply. Even the rebound in inventories at the end of 2021 failed to dampen the impact of Brazil's crop cuts in 2021. In a sense, we expect export potential to fall by 18% to 3, 8 million bags (raw beans + instant + coffee powder). The end-of-term inventory is expected to be 2.48 million bags in 211,22.

Balance of supply and demand of Brazilian Coffee for the year 2111 22:

Year 20 / 21

Year 21, 21, 22

change

Opening inventory

4.28 million bags

5.83 million bags

+ 36.2%

Output

6, 9.6 million bags

5, 6.5 million bags

-18.8%

Total supply

7, 3.88 million bags

6, 2.33 million bags

-15.6%

Domestic demand

2, 1.2 million bags

2, 1.5 million bags

+ 1.4%

Exit

4, 6.85 million bags

3, 8.35 million bags

-18.1%

Aggregate demand

6, 8.05 million bags

5, 9.85 million bags

-12.0%

Final inventory

5.83 million bags

2.48 million bags

-51.3%

From the performance of the above data, it is not difficult to explain that coffee prices have been rising recently. As of June 11, the spot Brazilian coffee price was 900 Brazilian reais / 60 kg.

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