SAO PAULO: Ample rains in producing regions recently have boosted prospects for Brazil’s 2018 coffee crop to reach a record, but questions remain regarding how big the output will be considering negative impacts of dry spells last year.
Initial estimates by market participants and statistics agencies indicate the world’s largest coffee exporter will produce more coffee than the last record in 2016 of 51.4 million 60-kg bags.
An average from seven estimates compiled by Reuters shows production in 2018 at 53.89 million bags, but still a large gap between the highest estimate of 60 million bags and the lowest at 47 million bags.
“The crop tends to be bigger due to arabica’s on year, but it would not reach record levels because of adverse weather in the last year,” said Silas Brasileiro, who heads Brazil’s National Coffee Council, a farmers’ lobby group.
In 2018, Brazil will be in the on year in arabica’s biennial production cycle, which alternates years of high and low outputs. Last year was an off year, with production seen by the government at 44.97 million bags.
Farmers say plants lost too many leaves during strong dry spells last year, which will reduce their production potential even with a good level of rains currently.
One large exporter who asked not to be named believes the more stable weather recently will indeed lead to a big output, close to 60 million bags, or more. “With all this rain, there is nothing in the way of a very large crop,” the exporter said.
Brazil’s agriculture statistics agency Conab will release on Thursday its first estimate for the 2018 crop.
According to Thomson Reuters Agriculture Weather Dashboard, cumulative rains since mid-November in South Minas, Brazil’s top producing region, reached 432 millimeters (17.01 inches), still shy of normal level of 498 millimeters for the period.
Monday’s forecast in the dashboard indicates 160 millimeters more to reach South Minas from Tuesday to the end of the month.
The prospect of large production in Brazil this year is one factor behind coffee futures in New York remaining around 120 cents per pound, far from highs of 170 cents seen late in 2016.
Brazil exported a smaller than expected volume last year, partially due to farmers’ move to hold on to stocks waiting for eventual higher prices. Insect infestations also played a roll, cutting the amount of export-quality beans available.
Source: Brecorder.com
