Brazilian coffee farmers accused coffee buyers of
exaggerating crop production forecasts in an effort to undermine prices even as
the US Department of Agriculture unveiled an upbeat estimate for this year's
Brazil's Conselho Nacional do Café,
a producers' organisation, branded "absurd" an estimate by coffee exporter Terra Forte last week that
Brazil's coffee harvest would hit 53.4m bags in 2013-14, boosted by increased
output in the south of Minas Gerais, a key bean-producing state.
A figure at this level would be higher than the official estimate,
of 50.5m bags, for Brazil's production this season despite 2013-14 being an "off"
year in Brazil's cycle of alternate higher and lower output years.
"We firmly believe that next year's harvest will never exceed
the 2013 harvest, due to the drought that occurred after flowering in many
producing regions and the fact that the next season will be a low one in the
biennial arabica crop in Brazil," Silas Brasileiro, executive president of the
Over the last decade, production in "off" years has, at
best, fallen 9.6%, and in 2003 dropped 41%, according to data from official
crop bureau Conab.
Instead, the estimate marked the start of the "the season of
opportunistic speculation about the size of the Brazilian crop", said the council,
which flagged its links with coffee co-operatives to support its grasp of data.
"In recent years, it has been very easy and profitable for
speculators to disclose exaggerated numbers about the size of our production."
While some of these estimates are, according to the council,
poorly researched, they "are replicated in several international news agencies
and end up helping to depress the market".
New York arabica coffee futures on Friday hit their lowest for two years, although the benchmark March contract rebounded 1.2% on Monday
to stand at 144.80 cents a pound in lunchtime deals.
'By far the most
The comments come ahead of Conab data expected on December
20 to show the first official estimate for the 2013 coffee crop in Brazil, the
Conab data are "by far the most reliable numbers on the size
of the Brazilian crop", Mr Brasileiro said, while highlighting that they are "always
questioned by speculators easy for profit."
However, it is not just hedge fund operators which caution
over Conab data being too conservative, with veteran soft commodities analyst Judith Ganes-Chase last year saying that "if the Conab figures are on the mark,
Brazil would have run out of stocks a few years ago".
A US Department of Agriculture source, explaining why the
department's Brazilian coffee harvest data are typically higher than Conab's,
told Agrimoney.com that Brazilian stocks data turn negative "if you use Conab's
number in a long-term data series".
Conab vs USDA
The USDA on Friday unveiled coffee data which again showed
Brazilian output far higher than Conab's estimates.
The USDA pegged Brazil's 2012-13 crop at 55.9m bags, well
ahead of Conab's 50.5m-bag estimate.
The department lifted by 3.4m bags to 151.3m bags its
forecast for world production this season, a figure sufficient to bring a 3.0m-bag
rebound in inventories, ending a string of years of production deficits and
The USDA raised its estimate for the Vietnamese harvest by
2.6m bags to 25.0m bags, while making smaller upgrades to forecasts for
Honduras and Mexico too.