USDA Forecasts Growth in Global Coffee Production Amid Higher Demand

Coffee production is expected to increase due to rising consumption, according to forecasts from the US Department of Agriculture (USDA). The coming harvest, 2024/2025, is forecasted to increase by 7.1 million bags to 176.2m, with higher output in Brazil and Indonesia. A coffee bag is measured as 60kg. In Brazil, the combined Arabica and Robusta harvest is expected to reach 69.9m bags, an increase of 3.6m year on year. The largest export market for coffee is the EU, which is expected to grow by 2m bags to 47.5m. The USDA predicts that the US market will expand by 900,000 bags, reaching 24.5m.

In the 2023/24 harvest, Colombian coffee production was 12.2 million bags, but production was 15% below normal due to limited fertilizer use amid high costs for nitrogen and phosphate. The USDA forecasts output will rise by 200,000 bags to 12.4m bags due to increased rates of coffee cherry borer insect infestations. The industry undertook an “aggressive tree renovation” program that replaced trees with sturdier variants after insect and rust fungus damage to harvests in 2008.

In Vietnam, the USDA has forecast that production levels will not change, remaining at 29 million bags. The rainy season was slightly delayed and above-average temperatures were recorded in many areas, adversely affecting yields. Bean exports are forecast to drop nearly 500,000 bags to 24.4 million due to reduced total supply and rising domestic consumption.

Coffee commodity prices have been volatile in recent months, with coffee commodity prices experiencing unprecedented volatility. A report from GlobalData showed coffee futures prices surged in March and early April, with cheaper Robusta beans closing as high as $3,700 per tonne and more premium Arabica hitting $2.10 per pound, the highest level in over a year and a half.

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