Brazil Coffee Exports Down

COFFEE

The industry group Cecafe put Brazil’s green coffee exports in February at 3 million bags, down 11.7% from a year earlier. They attributed this mainly to less competitive prices relative to other producers, such as Vietnam. Arabica exports were down 2% to 2.77 million bags, and robusta exports fell 60% to around 226,000 bags. Brazilian production is expected to be lower in 2025/26 because of last year’s drought and because it is an off-year in their arabica cycle. These concerns were exacerbated by an extended dry spell in late 2024 that extended into this year, which helped push prices to new all-time highs. Brazil growing areas have seen a modest improvement in rainfall coverage recently, but World Weather Service is not convinced this is the start of a new trend.  The harvest is expected to begin between April and May. A report published by the United Nation’s Food and Agriculture Organization today mentioned that coffee price shocks take about a year to feed through to consumers and that the residual impact lasts at least four years. The report said that about 80% of these price rises will feed through to consumers over the course of 11 months in the European Union and 8 months for US consumers. The report also said prices for coffee bean growers rose 17.8% in Ethiopia, 12.3% in Kenya, 13.6% in Brazil, and 11.9% in Colombia, much slower than the gains in the futures. ICE certified arabica stocks fell 8,652 bags yesterday to 802,277.

COTTON

News that Vietnam is reviewing its duties on US goods could bode well for cotton exports, especially if it is seen as an offset to threatened retaliation from China. Vietnam had as $123 billion trade surplus with the US in the 2024, and they are reportedly eager to avoid reciprocal tariffs from the Trump administration. Vietnam is the already the largest buyer of US cotton for 2024/25 at 2.154 million bushels. They are followed by Pakistan at 2.134 million, Turkey at 1.448 million, and China at 805,000. The dollar is back lower this morning, which also helps improve US export prospects. World Weather Service expects no relief from dry conditions in West Texas and South Texas for at least another two weeks. The immediate concern would be over cotton planting in unirrigated fields in southern Texas and in Mexico, as dryland fields have no moisture to germinate seeds or support early development. The weekly Drought Monitor released yesterday showed approximately 33% of US cotton production was in an area experiencing drought as of March 11, which was an improvement over the 38% from the previous week. There was some improvement in areas of West Texas but not south of there. West Texas planting usually begins in May, which would leave plenty of time for a change in the pattern. Yesterday’s export sales report had the biggest weekly sales total since January 16 and the strongest shipments total for the marketing year.

COCOA

May Cocoa was back on the defensive overnight as it continued to consolidate inside the range of the past two weeks. Some traders had noticed that buying had emerged when prices fell below $8,000, but those buyers could be getting nervous with the market’s lack of upside follow-through. World Weather Service says the weather in West Africa weather should be favorable over the next ten days with some “welcome and needed” rain in Ivory Coast, Ghana and a few areas east to southern Nigeria. They noted that much of the precipitation will be light and during the coming week but a greater volume of rain should come, eventually. ICE certified cocoa stocks increased 61,539 bags yesterday to 1.640 million, their highest since November 18. Stocks are up 206,107 bags in the last six sessions and up 219,961 since first notice day for the March contract, which goes off the board today.

SUGAR

The Indian Sugar Mills Association said yesterday that the nation is likely to produce 26.4 million metric tons of sugar for the 2024/25 season to September, 2.9% lower than its previous estimate of 27.2 million. They pointed to lower sugar cane yields and early closure of mills. Indian mills have contracts to export 600,000 tons of sugar for the 2024/25 marketing year, but industry official told Reuters this week, but they are reluctant to sign further deals because local prices have increased. World Weather Service says Brazil’s weather looks to be almost ideal for sugarcane over the next ten days. The bi-monthly UNICA report on Brazilian Center-South released yesterday showed sugar production in the second half of February was 9,000 metric tons, up from a revised 8,700 in the first half of the month and down from 17,000 for the same period last year. Cumulative production has reached 39.822 million tons, down 42.175 million a year ago for a decline of 5.6%. Their 2024/25 crop year ends this month, and it looks like production will peak around 40 million tons.

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