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Rains ease worries over Brazil's 2020 coffee prospects

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Rains have eased concerns over Brazil’s coffee production prospects for 2020, Cepea said, while reporting too that officials appear to have underestimated this year’s harvest, by up to 5m bags.

 

“Rainfall in late September in much of the arabica coffee regions reassured growers,” Cepea said following a survey of producers.

 

The moisture “should favour the opening of new blooms, and also the setting of flowers that have already opened,” the research institute said.

 

Rains had proved substantial “especially in” Mogiana, in the state of Sao Paulo, in the south of Brazil, and in Cerrado Mineiros in the west of top growing state Minas Gerais.

 

‘May have a negative influence’

In robusta-gowing regions, “the weather also favoured the crops of Espírito Santo”, Brazil’s top producer of the bean, with precipitation of 23.4mm in São Mateus in the east of the state in the week to Monday.

 

The comments come amid a market focus on Brazil’s flowering season, with the success of the blossom formation, and then the setting into what will becomes the cherries harvested next year, viewed as critical to 2020 production prospects.

 

Cepea only on Tuesday reported that “Brazilian coffee growers have been worried about the hot and dry weather in most producing regions”, while highlighting too a long-term forecast from weather service Climatempo which appeared less than idea for flower setting.

 

“For the last quarter of the year, Climatempo forecasts irregular rains, which should be lower than the average, and temperatures above the average,” Cepea said.

 

Such conditions “may have a negative influence on the coffee output from the 2020-21 season”.

 

Conab vs Cepea

Next year will be an “on” one in Brazil’s cycle of alternate higher and lower cropping years, with much speculation over whether the harvest will beat levels for 2018 widely reported at more than 60m bags, setting a record high.

 

Conab, the official crop bureau, estimates it at 61.66m bags, while pegging the harvest in 2019, an “off” year, at 48.99m bags.

 

However, the bureau’s 2019 figure may be an underestimate, according to growers contacted by Cepea, who see a result of 50m-54m bags.

 

Cepea said its survey “confirmed a decrease in 2019-20 production, but not as sharp” as that estimated by Conab, except in the southern state of Parana.

 

There, contacts report “that the weather during the season damaged beans, whose quality is much lower than that in the previous crop”.

 

Arabica vs robusta

Among robusta-growing states, Rondonia in northern Brazil was seen showing, at 1.2m-1.8m bags, a production shortfall compared with the Conab estimate of 2.10m bags.

 

However, the Espirito Santo crop was pegged by Cepea contacts at 11m-13m bags, well above the 10.32m-bag figure shown by Conab, which estimates the whole robusta crop at 14.52m bags.

 

Nonetheless, even a harvest at that level represents a record high, and robusta prices in Brazil have indeed underperformed arabica ones in Brazil for most of 2019.

 

However, they have clawed back some ground in the last two weeks as withholding of robusta beans by producers and middlemen in top grower Vietnam has supported prices of the variety.

 

Separately, data from the International Coffee Organization showed Vietnam’s coffee exports tumbling 26% year on year in August, to 1.80m bags.

 

Brazil’s exports in August, at 3.33m bags of arabica and robusta combined, were down 6.0% year on year.

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