Coffee prices have seen moderate increases in March arabica coffee (KCH24) and Jan ICE robusta coffee (RMF24). Nearest-futures arabica coffee (KCZ23) and robusta coffee (RMF24) have seen a 5-1-4 month high and a 2-1/4 month high, respectively, due to shrinking ICE coffee inventories. The USDA’s Foreign Agriculture Service (FAS) projected Brazil’s 2023/24 arabica production to climb +12.8% y/y to 44.9 mln bags due to higher yields and increased planted acreage. Robusta coffee has carryover support from the USDA’s FAS cutting its 2023/24 Vietnam coffee production estimate to 27.8 mln bags from a May estimate of 31.3 mln bags. Brazil’s Minas Gerais region received 5.9 mm of rainfall in the past week, which could curb coffee yields and support prices. Uganda, the world’s fourth-largest robusta producer, has increased supplies. Vietnam’s agriculture department projected a -10% drop in coffee production due to drought, while Cecafe reported a 24% y/y increase in October green coffee exports. The U.S. Climate Prediction Center declared an El Nino weather event, which is likely to be supportive of coffee prices. Global coffee exports are shrinking, and the USDA’s FAS forecasts a 2.5% y/y increase in 2023/24 coffee production.
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