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Brazilian Coffee Market Outlook - With Cocapec

On Sep 1st, 2022 we spoke with Adilson Machado, the manager of Cocapec, one Brazil’s premier Coffee Coops.

Adilson himself is deeply experienced in the coffee business (been with Cocapec for 13 years) and he brings a wealth of knowledge and practical expertise to his position. In the sections that follow, we cover some highlights from the interview.

Adilson provided us his view on the Brazilian coffee market, expectations for weather, demand, the influence of macroeconomics, positioning, and his outlook for the 2022 and 2023 crops.

Brazilian Coffee Market with Adilson Machado - Part 1

For context, Cocapec is a large cooperative in the Alta Mogiana region (São Paulo state) that trades primarily #Arabica coffee. The region has a pronounced biennial cyle, so while the coop sells an average of 1.5 million bags of coffee per year, it fluctuates between 2m bags in on-cycle years and 1m in off-cycle years.

The region accounts for half of SP’s coffee production, which ultimately represents a 5% within Brazil’s total.


According to Adilson, we need to always consider the biology of the plant and not only weather conditions alone, when anticipating weather impact on the coffee crops.

As an example, last year we had good flowering but a bad fixation that was confirmed to a be result of stress due to past cold temperatures (2021 cold and frosts).

This is one of the reasons why it’s hard to determine a #weather scenario with 100% confidence, and Adilson was cautious about defining the future as certain.

Now entering the wet season, coffee regions in #Brazil need regular rains and light thermal oscillation. Expectations are of precipitation returning, and if there’s constancy, all indicates a good #blooming/flowering that will amount to a good crop next year.

Crop Outlook

Cocapec envisions the 2022 harvest closer to the 60m range rather than in the lower range of estimates of the market (50-53m). They see Conilon (#robusta) between 20 and 22m bags and Arabica between 33 and 35m bags.

Next year Brazil is likely to have a better harvest, but certainly not enough to cover the deficit of this poor on-cycle crop, according to Adilson’s view.

However, in 2024-2025 he anticipates that Brazil will be back into normality, with improved volumes to offer. In short, we may see a bigger and better harvest next year, but it may not be enough to recover the impact from the previous deficits of a weak 21 and a low (on-cycle) 22 crop.


According to Adilson, his team at the trading desk focuses on the main indicators that have potential to impact coffee and commodities in general. Their understanding is that fundamentals (S&D) are price drivers while macroeconomics contributes more to the market’s volatility.

In this interpretation, problems with both #Fundamentals and #Macro would eventually lead to big explosions in prices. The macroeconomic scenario now favors speculators' flight to more attractive assets against rising global #interestrates. Adilson also see’s the high and inverted #calendarspreads as a major driver for lower liquidity (#OpenInterest) in front months, which is making for large market oscillations.

However, the #USD has strong prospects while the #BRL is seen flat-to-weaker, which stands as a bearish opposition to price increase.


Cocapec does large business in Brazil’s internal market, which enables Adilson to form a solid view on #domesticconsumption. He is noticing inelasticity of #demand at play, meaning the high prices of coffee are not affecting net #consumption. However, he notes that although consumption is not retracing in volume, it is changing in qualitative terms: it’s shifting towards lower qualities, cheaper varieties, beans, flavors etc.

This is what is happening now in Brazil: it is a way that market adapts to the final consumer, so he doesn’t feel a big difference in final prices because of inflation and higher coffee prices.


#Logistics are still difficult. Adilson mentioned high freight costs and problems with container availability persisting. However, he made sure to highlight the fact that logistics in Brazil have always been a hard puzzle to solve, not only for coffee, but for all products in general.

The pandemic unbalanced the supply chain and made everything harder than usual, which interfered with the entire logistics process. He believes we will be alternating between moments of greater comfort and greater difficulty as we progress towards normality while the market accommodates with solutions, such as the break bulk use.


These highlights are short summaries of a broader and more detailed conversation on Brazil and the global coffee market but is from the perspective of an insider who has direct contact with producers and both domestic and external markets.

He underscored the idea that coffee is heading towards better days but emphasizing the short-term tightness and the fact that a more solid improvement is far away in time (2024-25).

In the podcast and video, he goes into more detail on logistics, advises to producers, calendar spreads and differentials—all important components of the worldview of traders, roasters and specs.

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