War affects soluble coffee exports; still, sales are at an all-time high

Russia and Ukraine, two important importers of soluble coffee from Brazil, reduced purchases in 2022. Placed in 2nd and 7th places in 2021, the countries dropped to 8th and 31st, respectively, last year.

It wasn’t just the war in Eastern Europe that caused exports to drop. The world economy at a slower pace, bottlenecks and high logistics costs, inflation, and rising prices of raw materials also affected exports. Consumers with lower income reduced purchases.

Some countries, however, swam against the tide. Among them Myanmar, which rose to the 7th position among importers of the Brazilian product, according to Aguinaldo Lima, director of Institutional Relations at Abics (Brazilian Association of the Soluble Coffee Industry).

Other surprises include Indonesia and Colombia, both at the top of coffee production rankings. According to Lima, Colombians import from Brazil to resell the commodity abroad because of their commercial performance and good image in the international market.

The Brazilian soluble coffee industry, which has been stable for 60 years, attracts foreign buyers because of its good technological use, allowing a greater extraction rate, and creating products that meet the customer’s needs, according to the entity’s director.

However, the market is concerned about a possible loss of competitiveness in the international sphere. This occurs when raw material is more expensive in the domestic market than in the foreign market. According to Lima, seeking coffee abroad can be an option, but there are always additional costs.

Exports of soluble coffee fell to 85.9 thousand tonnes last year after reaching 94.4 thousand in 2021—the drop in 2022 breaks a series of four consecutive years of increase in foreign sales.

See below the volume of soluble coffee (hs 21010000) exported from Brazil between Jan 2019 and Dec 2022. The data is from DataLiner.

Soluble coffee exports | Jan 2019 -Dec 2022 | wtmt

Source: DataLiner (click here to request a demo)

The United States, Argentina, and Indonesia were Brazil’s most important customers in terms of volume. Finland also rose several positions in the ranking after buying 3,628 tonnes, 433% more than in 2021. On the other hand, Russian imports retreated by 65%. The same goes for Ukraine, with a 73% drop.

According to Abics, with a greater supply and diversity of products, the Brazilian market for soluble coffee is also growing. In 2022, 999,000 bags were consumed, a historical record.

Green coffee exports were also lower than in 2021, but revenues increased by 47% to US$ 8.5 billion, according to Secex data (Secretary of Foreign Trade).

Source: Folha de S. Paulo

To read the original reporting, please check: https://www1.folha.uol.com.br/colunas/vaivem/2023/01/guerra-afeta-exportacao-de-cafe-soluvel-mas-faturamento-e-recorde.shtml

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