More speculation on Brazil harvests...

Weatherman says talk of big Brazil coffee losses premature - RTRS

31-Jan-2014 12:52

By Reese Ewing and Marcy Nicholson

SAO PAULO/NEW YORK, Jan 31 (Reuters) - The hot, dry spell affecting Brazil's coffee crop will reduce yields, but talk among farmers of major losses is premature given that soil moisture levels are still satisfactory, local weather forecaster Somar said on Friday.

Somar data shows that maximum temperatures are reaching 35 Celsius (95 Fahrenheit) in the main coffee growing areas of Minas Gerais and Sao Paulo, which accelerates evaporation.

"There has been a lot of talk about production losses to coffee due to the dry weather," said Somar's agricultural meteorologist Marco Antonio dos Santos.

"It should be said that soil moisture levels are still very satisfactory and so the trees are able to develop (in such conditions) with ease."

January in Sao Paulo is likely to surpass February 1984 as the city's hottest month ever, according to INMET, Brazil's national meteorological institute. (Full Story)

Rainfall levels in January are 67-85 percent below average in South Minas, a leading arabica growing region.

Global arabica coffee prices KCc1 fell to their lowest in seven years in November but have started to recover, more notably with a 9 percent rally the past three days on the news of hot, dry weather hanging over Brazil's Southeast.

On Friday, the benchmark arabica contract on ICE Futures U.S. jumped 4 percent to a six-month high near $1.25 per lb in heavy volume.

"We were all concerned two weeks ago that there was too much rain, flooding, etc. Fourteen days later, not enough water," said one U.S. coffee dealer.

"If you get a cool-down soon and a little rain, everything will spring back, but I can understand the desire to take some (contracts) off the table in case it doesn't."

Marco Antonio Jacob, a coffee farmer in Mogi Guaçu, São Paulo, said the dry weather already reduced output by 6 million bags, creating a buzz on a local social network for coffee growers, Rede Social do Café.

However, reports from farmers should be taken with caution, especially in times of low prices or bumper harvests, as they are sometimes regarded as exaggerating losses.

Rainfall was closer to average in December and above average in other regions of Minas Gerais, which accounts for 50 percent of Brazil's coffee output.

 

RESILIENT

Somar's Dos Santos said this helped create a certain reserve of moisture in the soil.

Coffee trees are quite resilient to limited periods of hot, dry weather provided they are not passing through vulnerable stages of development such as flowering, which had plentiful and regular rainfall this season.

U.S.-based MDA Weather Services' daily report said limited rains will allow dryness to continue to build across Sao Paulo and southern Minas Gerais, which are "unfavorable for cherry growth".

Somar's dos Santos said that hot, dry weather causes the metabolism of the coffee tree to slow the development of the fruit that encases the beans, in order to conserve moisture and nutrients until rains return. (Full Story)

"But since this period (of hot, dry weather) has been short, it is not possible to say that major losses are occurring in the production of coffee," he said.

Dos Santos warned, however, that the weather to come in the following weeks could be more problematic: No widespread rain is forecast through Feb. 20.

He said the beans produced under these hot, dry conditions will likely be smaller and lighter in general.

Some regions, however, will get isolated rains in the form of evening thundershowers, which will create considerable variation in the quality of coffee produced in any given regions.

"One fact is certain, there will be a reduction in output of coffee from Brazil due to the weather in 2014/15," said Dos Santos.

"The 'Achilles heel' is knowing with exactitude the size of the loss since there will not be a total absence of rain but simply rains insufficient to reverse the general outlook."