Commodities Buzz: Brazil Coffee Production To Increase 13 percent In 2018/19

As per latest update from ATO/Sao Paulo forecasts Brazils coffee production for Marketing Year (MY) 2018/19 (July-June) record at 60.2 million 60-kg bags, an increase of 9.3 million bags relative to the previous crop. Good weather conditions supported fruit setting and filling, especially in Robusta growing regions. In addition, the majority of the Arabica trees are in the on-year of the biennial production cycle. Coffee exports for MY 2018/19 are expected to bounce back to 35.33 million bags, an increase of 4.91 compared to the previous MY, due to expected higher product available.

The Agricultural Trade Office in Sao Paulo (ATO) projects Brazilian marketing year (MY) 2018/2019 (July-June) coffee production at a record 60.2 million bags (60 kilograms per bag), green equivalent, an increase of 18 percent relative to the previous season. MY 2018/19 Arabica production is forecast at 44.5 million bags, an increase of 6 million bags vis-avis the previous crop, given that the majority of producing areas are in the on-year of the biennial production cycle. Note that coffee production both in Parana and south-eastern Minas Gerais are on the off-year of the biennial production cycle, however, the drop in production is expected to be less intense than average. Good weather conditions in the majority of the producing regions contributed to steady fruit setting, coffee bean development and filling, and will likely result in high yields. The bulk of the Arabica coffee harvest should start in May/June. Robusta/Conillon production for MY 2018/19 is forecast at 15.7 million bags, an increase of 27 percent compared to MY 2017/18 (12.4 million bags). Good weather conditions, especially abundant rainfall, are the drivers for expected higher production in the three major producing states of Espirito Santo, Rondonia, and Bahia. The expansion of clonal seedlings and improved crop management techniques have also support the likely increase in Rondonia. Harvest in the Robusta/Conillon producing regions started in April/May.

Total Brazilian coffee exports for MY 2018/19 are forecast up at 35.33 60-kg million bags, due to expected larger coffee supply. Green bean exports are forecast to account for 32 million bags, while soluble coffee exports are projected at 3.3 million bags. ATO/Sao Paulo estimates coffee exports for MY 2017/18 at 30.42 million 60-kg bags, green beans, a decrease of eight percent from MY 2016/17 (33.08 million bags), based on year-to-date export volumes and anticipated May-June loadings. Green bean (Arabica and Robusta/Conillon) exports are estimated at 27.2 million bags, whereas soluble coffee exports are estimated at 3.2 million bags