In two years, Brazil may have more robusta coffee supply than Vietnam

Brazil is on track to overtake Vietnam in robusta coffee production volume between 2025 and 2026. According to analysts and traders, climate problems in the Asian country, the largest producer and exporter of the variety, are expected to reduce supply, while the outlook for Brazilian production is for an increase.

The drought that hit Vietnam caused harvest estimates to be reduced to 24 million tonnes from 26 million tonnes, according to Fernando Maximiliano, a coffee consultant at StoneX. Industrial, trading, and exporting companies believe this is the new ceiling for production in Vietnam.

The consultant said that if there are no extreme weather events, Brazil’s robusta production could jump from 22.7 million tonnes in the 2024/25 crop to more than 24 million tonnes by the 2026/27 cycle.

According to him, Brazil is the only country capable of increasing the planted area with pasture conversions, especially in the Espírito Santo state, the main producer of Brazil’s robusta-like variety known as conilon. However, cultivation of the variety can also advance in the south of Bahia, east of Minas Gerais, and Rondônia.

The chart below shows Brazil’s export volume of coffee beans. The data is from DataLiner.

Coffee Beans Export Volume | Jan 2021 – Apr 2024 | WTMT

Source: DataLiner (click here to request a demo)

Brazil and Vietnam account for 55% of coffee production in the world. With the adversities in the Asian country, Brazil is gaining strength as the source of raw materials for the global industry, said Trishul Mandana, managing director of coffee at Volcafé. Teddy Esteve, the managing director of Ecom, agrees with him. “The market is in Brazil’s hands,” he said.

“In the next decade, Brazil will offer 75% to 80% of the coffee the world needs, because it is an extremely efficient country in production and cost, with the capacity to react to global demand,” said Mr. Mandana.

On the other hand, he believes that this causes fear due to the world’s reliance on few producers, especially if Brazil’s production is affected by an extreme weather event.

Ben Clarkson, head of the coffee platform at Louis Dreyfus Company, acknowledged that the industry is benefiting from Brazilian supply in the face of a drop in supply from Vietnam. For him, Brazil is efficient and, compared to Asian producers, is more attractive to companies in the coffee processing chain.

According to Mr. Clarkson, the global market may have a small coffee deficit this harvest due to conilon crop failures amid a surplus supply of Arabica coffee.

Source: Valor International

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