Brazil’s Coffee Production, Bean Quality Perk Up

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Top global coffee producer Brazil will increase green coffee output in 2018/19, as favorable growing conditions boost crop yields as well as bean quality. The USDA revised its production estimates for the current year to 63.4 million 60-kg bags, a jump of 5 percent from previous forecasts. Arabica production will reach 46.9 million bags, and robusta output is expected to hit 16.5 million bags. Production of both coffee varieties is up 5 percent from last year. In addition to higher coffee yields, coffee traders are reporting above-average coffee bean quality in a majority of the country’s growing regions.

Coffee exports are estimated to jump to 35.3 million bags for 2018/19, up 16 percent from last year, due to the increased supply. And ending stocks for 2018/19 are estimated at 6.85 million bags, an increase of 4.9 million bags compared with the previous season. Brazil's coffee producers have requested government funding to boost coffee stocks to avoid selling product during periods when coffee prices are depressed.

The increase in production comes as domestic coffee consumption is rising. Consumption in 2018/19 is forecast at 23.2 million 60-kg bags, representing growth of 3.5 percent from last year.

Although production estimates for 2019/20 have not yet been made, USDA analysts expect output to drop as this year’s coffee plants enter the lower production year of their biennial growth cycle. This, coupled with less investment in the coffee industry due to weak coffee prices, high production costs, and a depreciated Brazilian currency, the real, will negatively affect yields. With Gro Intelligence, traders readily monitor coffee production data across the globe and keep up with market developments.

Brazil’s green coffee yields (line, left chart) are increasing, causing production estimates to be revised higher (bar, left chart). The country’s domestic coffee consumption and exports are rising as well (right).

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