Tuesday 27 September 2022

Safras & Mercado says Brazil’s crop may be lower than expected

Must read

MILAN – According to last Thursday’s data from Safras & Mercado, Brazilian coffee farmers harvested 89% of the 2022/23 coffee crop as of Aug 9, slightly behind the 5-year average of 91% but in line with last year’s level. The Arabica harvest is 84% complete, while the Robusta harvest is 97% complete. The Safras survey indicates that until August 9, sales of Brazil’s 22/23 crop reached 45% of the expected production.

The growers’ current commitment remains well below the same time last year, when sales had reached 53%. This year’s sales also remain above the five-year average for the period, which is around 36% of production. Safras & Mercado pegs this year’s crop at 61.10 million bags.

However, the consultancy said, in a separate report, that Brazil’s 2022 crop might fall short of expectations.

“The drought in April and May and the frost in July 2021 had already taken away the productive potential of Brazil’s 2022 crop. In this sense, what is now under discussion is a failure above expectations” says Safras & Mercado.

It is worth noting that this is not a closed idea, but just “a preliminary impression because of the news coming from the field.”

According to the report, Cerrado “is the region that most worries us. In areas where there was frost or very intense cold, crops are producing much less coffee than initially expected. Safras projected losses of 23% before the harvest compared to the crop reaped in 2020, but there are signs that the decline in production could be much greater, by 38% to 45%”

In Southern Minas Gerais, the initial idea was a loss of productive potential of 30% from what was reaped in 2020. But these comparative losses can rise to 36% in view of the worsening production reported by growers.

In general terms, the Brazilian Arabica crop has the potential to be corrected down by 3.0 to 4.0 million bags from the estimate at the early harvest.

Brazilian Conillon production is moving the other way round, given the positive surprise of crops. And with that, the output may stay between 1.0 and 1.5 million bags higher than expected, according to preliminary signs from growers.

Latest article