ao link

News

Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

USDA flags 'lower' Brazilian coffee quality, as it forecasts world stocks drawdown

TwitterLinkedineCard

World coffee stocks will fall by 2.80m bags next season, undermined by weaker Brazilian and Honduran production, US officials said, cautioning over the quality of the Brazil’s harvest too.

 

The US Department of Agriculture, in its first estimates for world coffee supply and demand in 2019-20, forecast global inventories ending the season at 33.55m bags.

 

That compares with a stocks estimate of 36.35m bags for this season, downgraded by 708,000 bags from the previous forecast, made in December.

 

The expectation of a stock drawdown next season reflected ideas of a 5.37m-bag drop in output, the biggest decline in five years, while demand grows by 4.03m bags to a record 167.9m bags,

 

That will extend an unbroken run of demand growth which began in 2011-12, and is seen adding 26.4m bags to world consumption as of 2019-20.

 

‘Off-year of the biennial cycle’

The forecast for reduced coffee output in 2019-20 is based on ideas of weaker production of arabica beans, reflecting largely an estimate for a smaller crop in Brazil, where 2019 is an “off” year in the country’s cycle of alternate higher and lower harvests.

 

“Good weather conditions generally prevailed in most coffee growing regions during the blossoming and fruit-forming stages,” the USDA said.

 

“However, production is expected to drop compared to the previous season since most trees are in the off-year of the biennial production cycle.”

 

‘Crop quality is expected lower’

The USDA also cautioned that “crop quality is expected lower than last year because trees in many areas had multiple stages of maturity when the coffee cherries were harvested”.

 

The quality, as well as quantity, of Brazil’s ongoing arabica harvest has been a key concern for investors, and seen as a large driver of a late-May rebound in New York arabica futures, before a more recent retreat.

 

Trading house Volcafe, for instance, recently highlighted “fears over quality”, adding that “some of the quality concerns voiced reflect multiple flowering last year, which led uneven ripening”.

 

Trading house I&M Smith noted “reports of some quality concerns emanating from Brazil,” reflecting the “fact that many farms experienced multiple flowering last year, which will relate to a lack of uniformity of ripening and… a higher percentage of under and over ripe cherries included with the harvest”.

 

However, it added that “with a 21m-bags domestic market to absorb most of the lower quality coffees, that this should not really impact upon the availability of quality coffees for the consumer markets,” noting too the prospect of blending new crop supplies with higher-quality stocks let over from last year.

 

 

 

Mexico vs Honduras

The USDA too forecast a drop in 500,000-bag drop, to a four-year low of 6.50m bags, in arabica output from Honduras, the fourth-ranked grower of the variety.

 

It noted that “some countries in the region continue to struggle with the coffee rust outbreak that first lowered output in 2013-14”.

 

However, “favourable weather” was seen helping Mexico buck the regional trend, and lift output by 500,000 bags to 4.35m bags.

 

And, among robusta growing countries, output was seen growing in 2019-20 in all of the top four – Vietnam, Brazil, Indonesia and India – to help world output of the variety added 1.74m bags to 71.85m bags.

 

‘Good flowering and fruit-set’

The USDA said that Vietnam’s overall coffee production was seen edging 100,000 bags higher to 30.5m bags all but 1.0m bags comprising robusta beans –noting that the “rainy season was slightly delayed, but adequate for good flowering and fruit-set”.

 

It also flagged that “with black pepper prices falling over the last three years, farmers are no longer replacing coffee trees with pepper,” although some farmers “have begun to plant durian, mango, avocado, and passion fruit trees in their coffee orchards”.

TwitterLinkedineCard
Related Stories

Evening markets: Grains suffer touch of late-week profit taking

The likes of corn and wheat trade lower in closing deals of a positive week. But the vegetable oil complex, and canola, stay strong

Failed hold-outs may foster dairy price gains at next week's GDT auction

Futures prices suggest modest gains in the offing at Tuesday’s GlobalDairyTrade auction - for whole milk powder, at least

Microsoft mogul makes a mint out of betting the farm

Prices of US farmland, of which Bill Gates is the biggest owner, are rising at their quickest since 2012

Weekly grain and oilseeds market view from Europe, April 16

UK wheat import needs to extend into early 2021-22... Cold European temperatures... "Rapeseed prices may be firm for a while"...
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2021

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069