SAO PAULO, Brazil – While the Brazilian agents consulted by Cepea believe the national coffee output will reach from 50 to 54 million bags (60 kilos) in the 2019/20 crop, Conab’s (National Company for Food Supply) estimates are lower, at 48.9 million bags of processed beans (Arabica and Robusta), a steep 20.5% down compared to that from 2018/19.
Conab’s lower estimates are linked to both the negative biennial cycle in Arabica crops and lower productivity, due to unfavorable weather. It is worth to mention that between December 2018 and January 2019, when crops were going through the beans-filling stage, temperatures were high and there was no rain is several coffee-producing regions in Brazil.
The agents consulted by Cepea have confirmed a decrease in the 2019/20 production, but not as sharp, except in northwestern Paraná. These agents claim that the weather during the season damaged beans, whose quality is much lower than that in the previous crop.
Concerning Robusta crops, Conab estimates production to reach 10.3 million bags in Espírito Santo State, while the agents consulted by Cepea expect the output to range from 11 to 13 million bags. In Rondônia, Conab forecasts production at 2 million bags, while the agents consulted believe it will range from 1.2 to 1.8 million bags.
Brazilian coffee growers have been worried about the hot and dry weather in most producing regions. For Arabica, agents reported that some flowers dropped down in September. However, the effects on next crop’s production are still very low.
For the last quarter of the year, Climatempo (weather forecast agency) forecasts irregular rains, which should be lower than the average, and temperatures above the average, which may have a negative influence on the coffee output from the 2020/21 season.
Arabica coffee prices rose sharply in September, boosted by the international valuation of this variety as well as the US dollar appreciation. In this scenario, some agents returned to the market, fastening the trading pace, both in the spot market and for future contracts for 2020/21.
On September 30, the Cepea/Esalq Index for arabica coffee type 6 (delivered in São Paulo) closed at 438.49 BRL (105.64 USD) per 60-kilo bag, 5.1% up compared to that on August 30. The US dollar, in turn, closed at 4.151 BRL, 0.48% up in the same comparison.
Robusta quotes increased too, but not as sharply as arabica prices, influenced by the international market. Liquidity, in turn, was low. The Cepea/Esalq Index for the Robusta type 6, screen 13, Espírito Santo State, closed at 294.47 BRL (70.94 USD) per bag, 1% up compared to that on August 30.