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Mixed Brazil coffee flowering talk, as 2015 crop estimates loom

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Cepea flagged a strong outlook for Brazil's robusta coffee crop next year, but mixed blossoming in arabica-growing areas, as Volcafe began the countdown to when the first "realistic" estimates for the country's 2015 output.

Cepea, a research institute linked to Sao Paulo University, said that coffee plantations in Espirito Santo, which produces most of Brazil's robusta crop, had seen a "positive" flowering period in almost all areas.

"Therefore a good crop is expected," Cepea said, after a strong 2014 result, when overall Brazilian robusta output soared 20% to 13.04m bags, thanks to growing regions avoiding the worst of this year's drought and, in many cases, possessing efficient irrigation networks.

However, in areas growing arabica – Brazil's main coffee crop, of which production this year fell by 16.1% to 32.11m bags according to the country's official Conab crop bureau – recent rains had helped flowering, but not resolved the setback from the dearth of rainfall for most of the year.

Flowering record

In Garca, in Sao Paulo state, where blossoming is typically relatively, late the rains had helped flowering arrive on time, late last month, Cepea said.

However, while arriving around the same in south western Minas Gerais, the top arabica-producing state, this represented a delay.

In Cerrado Mineiro, in north west Minas Gerais, while two flowering periods had arrived, the gap between them, of a month, might cause some harvesting problems, implying a large variation in bean-ripening times.

Meanwhile, Zona da Mata, in south east Minas Gerais has "not registered blossoming yet", although rains in the forecast are expected to encourage opening of the first flowers.

Overall, rainfall appears sufficient to fix coffee beans formed from the flowers.

However, given that 2015 is a "off" season in Brazil's cycle of alternate higher and lower producing years, and the drought damage already sustained by this year's drop, "agents expect, for the time being, that the production will be lower than the productive potential", Cepea said.

Brazil was for 2014, an "on" year, deemed capable of producing some 60m bags of coffee, arabica and robusta combined, before drought hit.

'Stunted growth'

Separately, Swiss-based Volcafe said it might, in mid-December, be possible to make a "realistic forecast" of Brazil's coffee crop next year, when the success of the flowering/bean fixing process, and the extent of tree pruning by farmers, can be better quantified.

"The start of rains in Brazil at the end of October resulted in widespread flowering," said Volcafe, part of the ED&F Man commodities empire.

"However, stunted growth and other negative effects from the drought will impact production potential.

"The scale of these impacts differs greatly by region and even by farm, and not until surveys are conducted post flowering will it be possible to measure the drought influence on the 2015 crop."

'Increased the concerns'

Volcafe, which kept at 47m bags its estimate for Brazil's overall coffee output this year, said that the doubts about the 2015 harvest "an exceedingly high level of uncertainty exists now in the [global] market about fundamentals in 2015-16.

"This uncertainty and risk has increased the concerns of industry, maintained speculative interest and kept futures prices elevated," a dynamic which appears likely to remain until a clearer view is obtained of next year's Brazilian production prospects.

Volcafe's comments came in a report, the headline findings of which hit the market late on Friday, in which it raised by some 1m bags to 9.9m bags its estimate for the world coffee production deficit in 2014-15.

The revision reflected in the main a cut of 1.2m bags to 27.4m bags in output for Vietnam, the top robusta-producing country.

By Agrimoney.com

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