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Commodities group sees Brazilian production down by 20 percent in 2017/18

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MILAN – Coffee production in Brazil is likely to drop between 15 and 20 percent on year due to the off-year in the biennial cycle, according to Joseph Reiner – global head of coffee for Chinese commodities group COFCO. The estimate is based on a field survey led by the company’s research team in the past weeks.

In its first official estimate Conab pegs the next 2017/18 coffee harvest between 43.64 and 47.51 million bags down between 15 and 7.5 percent respectively.

Brazilian coffee growing traditionally follows a cycle of huge biennial swings, with an “on” year of large production followed by an “off” year of low output for Arabicas.

“We’ve been to a lot of places, and most Arabica producing regions will effectively have smaller outputs. Between 15 and 20 percent less, but I would say more like 15 percent less,” said Reiner, who took the COFCO job this year after 11 years at U.S. chocolate maker Mars.

Reiner said many coffee farmers decided to adopt severe pruning after the strong harvest last year, since they already expected a smaller production. That could reinforce the off-year in certain regions, but may prepare the fields well for 2018, when trees should be refreshed.

“We have indications for a significantly larger crop in 2018,” he said, adding that newly planted areas should also boost the trend.