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Conab sees record Brazilian coffee output in 2018 - with dryness offering some help

1/19/2018

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Brazil will reap a record coffee harvest this year, supported by strong yield improvement in both main producing states, the official Conab bureau said, backing market expectations of a bumper crop.
 
Conab, in its first forecast for 2018 coffee output in the world’s top producing country, pegged the harvest at 54.44m-58.51m tonnes, a figure which, even at the bottom of the range, would beat the current high of 51.37m bags achieved two years ago.
 
“After three years of difficulties in coffee production, this year is much more favourable,” said Silvio Farnese, coffee director at the agriculture ministry’s policy unit.
 
Output last year – an “off” year in Brazil’s cycle of alternate higher and lower arabica-producing years - totalled 44.97m bags, Conab said, lifting its September estimate by 200,000 bags.
 
The upgrade was down in the main to an improved figure for arabica, which accounts for the majority of the country’s output.
 
‘Expectation of high production’
 
For this year, Brazil’s arabica output was forecast at 41.74m-44.55m bags, an increase of up to 30% year on year, with strong gains in states including top grower Minas Gerais.
 
There, production was forecast rising by up to 26%, to 28.77m-30.29m bags, backed by an extra 50,000 hectares of mature plantation, besides a boost to yield prospects from “good flowering” in October and November, when a more typical rainy season kicked in too.
 
Indeed, the decent blossoming period and the “regularisation” of the rainy season, combined with it being an “on” season in the two-year cycle, “lead to an expectation of high production” in Minas Gerais this year, Conab said.
 
The harvest forecast was receiving an extra boost from plantations in the south eastern region of Zona de Mata, where successive years of weather upsets had reversed a contrary pattern, whereby trees had seen their production cycle operating in a contrary way to that in most of Minas Gerais.
 
Pest, defoliation worries
 
Conab flagged some concerns over Minas Gerais output thanks to dryness between July and November which caused some trees to lose leaves, “especially in low altitude regions”.
 
Outbreaks of borer beetle and potential knock-on effects from temperature volatility were also cited as production threats.
 
“However, in general, the crops have been responding well to the resumption of rainfall in November,” the bureau said.
 
Enemy turns friend
 
For robusta coffee, Conab forecast Brazilian output this year at 12.70m-13.96m bags, growth of up to 30% year on year, led by growth in Espirito Santo, the top robusta-growing state.
 
Indeed, the Espirito Santo harvest of robusta beans was seen soaring by up to 46%, to 7.66m-8.65m bags, after “very good flowering” – boosted, ironically, by dryness in the state, where drought has been a longstanding setback to output prospects.
 
“A determining factor for the number of flowers observed, besides the good health of trees thanks to the rains that came in [Brazil’s] autumn and winter, was the August drought,” Conab said.
 
“That promoted a water stress which, with the return of the rains in September, stimulated good uniformity of flowering in most regions.”
 
More to come?
 
Nonetheless, Conab added that Espirito Santo output would still in 2018 not reach its potential, with many plantations reseeded after tree losses to drought yet to come into production – or not yet replanted at all.
 
Furthermore, many of the state’s producers, whose finances were sapped by successive poor harvests, lack the resources to invest in crop inputs.
 
“Even if it exceeds the last harvest, the 2018 crop should still be less than the potential harvest,” the bureau said.
 
Conab vs industry
 
While Conab coffee harvest estimates are viewed historically as underestimates, Thursday’s outlook appears close to industry estimates.
 
Rabobank on Wednesday, for example, restated a forecast of a 59m-bag harvest this year, comprising 42.4m bags of arabica and 16.6m bags of robusta.
 
Indeed, Conab’s forecast is above estimates from many other observers, with MB Agro pegging the crop at 51.0m bags and Sincal at 47.0m bags.
 
A Reuters poll last week put the average forecast at 53.89m bags, with estimates ranging from 47.0m-60.0m bags

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  • Home
  • Our Coffees
    • Montreal 'Spot' Offerings
    • New York 'Spot' Offerings
  • Our History
  • About N J Douek
    • Some of our services
    • Meet some of our team
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  • Coffee Commentaries
  • Price charts
  • Contact Us
  • Useful Info
  • Accueil
  • Nos cafés
    • Nos cafés à Montréal
    • Nos cafés à New York
  • Notre histoire
  • À propos de N J Douek
    • Certains de nos Services
    • Rencontrez notre equipe
    • Notre labo et bureaux
  • Nous contacter
  • Informations Utiles
  • Chartes de prix