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504 views December 29, 2017 posted by Maja Wallengren

LIVE From Brazil, The Brazil Coffee Nightmare Worsens As 2016-17 Crop Views Drop Fast, Now Seen At Max 48M-49M Bags

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MARKET ANALYSIS: SpillingTheBeans is Back in Brazil — And The 2015-16 Brazil Coffee Crop IS In Trouble at 44M-45M Bags

The new coffee harvest in Brazil is officially underway but climate change has once again cut dramatically into the forecast and the new crop is unlikely to produce more than 47-48M bags at the most. Further losses could emerge both to the Arabica crop across Minas Gerais from two years of aumulated drought damage and the Conilon-robusta crop in Espirito Santo. Don’t miss all my latest tweets and details from SpillingTheBeans just completed 12-day crop trip to Brazil 🙂 https://twitter.com/SpillingTheBean
El Niño Southern

Back on popular demand, this report was initially published on July 24th, but there has been NO developments that suggest the negative impact of another bad and small crop from the world’s top grower Brazil has improved. Roasters, buyers and coffee lovers, beware, the world is running out of coffee and even Brazil can’t help!

Dear Friends and Followers! We are excited to let you know that Spilling The Beans is back in Brazil at the moment, taking in all the latest news, analysis and developments from the 2015-16 coffee harvest which is already being wrapped up in several regions. This is a Blog EXCLUSIVE from SpillingTheBeans IN the Brazilian coffee lands.

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JULY 24 (SpillingTheBeans)–The new Brazil coffee crop is in trouble, and even though the market continues to try to dismiss just how bad the situation is, an even more severe deficit than previously anticipated is brewing for buyers and consumers ahead of the key roaster season in the U.S. which starts between late September and October. Based on the mounting evidence emerging from the new harvest, which confirms not only a significant reduction in the overall crop but also testify to a sharply reduced average bean size, SpillingTheBeans agrees with analysts that put the final range for the 2015-16 harvest volume from Brazil at 44 to 45 million 60-kilogram bags.

After three years with significant negative complications from weather in Brazil — starting with the drought in Espirito Santo in the first quarter of 2013 which led to a drop of some 5 million 60-kilogram bags alone from the state in Brazil’s 2013-14 harvest — there is no evidence of any significant recovery taking place anywhere in the Brazilian coffee lands with the new crop.

The drought which caused prices to rally in April and May last year is still causing problems, and the 6-week dry spell between September and October last year are turning out to have just as bad an impact as the most bearish and pessimistic analysts had projected.

Brazil’s key producing region of Southern Minas are by all accounts expecting to wrap up a lower crop for the 3rd consecutive year, with overall production in Southern Minas seen ending between 20 and 25 percent below the 14 million produced in the 2012-13 harvest year.

In the Minas Gerais region of Cerrado, the harvest is running 6 weeks late as the drought delayed the main flowering until the very end of October last year. A second dry spell in January furthermore left the final beans harvested here at significantly reduced screen size and producers across the region are expecting the final harvest result to be between 20 and 30 percent below last year, and the final volume from the region may not even surpass 4.5 million bags.

The state of Sao Paulo is similarly registering a sharply reduced bean size because of the dry spell in January, and with only a handful of exemptions on estates that were able to irrigate tress in January, and that way ensure the bean size developed normally, the average outlook for the state is for production to be down about 20 percent.

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Taking in the view from top of the harvest machines at the O’Coffee estates in Alta Mogiana

Between the start of flowering in Espirito Santo last September and through February, when the young coffee cherry go through the crucial period of bean formation, the state recorded over 100 days without any rains at all.

If weather had been kind to Espirito Santo in this harvest the 2015-16 cycle could have been the year — 3rd crop after a severe drought — where plants and soils would have been able to pose a recovery. But with over 100 days with NO rains at all, all those in the trade who have held out hopes for the crop in Espirito Santo to be the saviour of the 2015-16 harvest are going to be disappointed.

On top of all this, the persistently low prices that have prevailed in the market for most of the past 10 months have also resulted in Brazil’s growers applying notably less fertilizer and other inputs on farms. No surprise here, but it is remarkable how arrogant the market continues to be in refusing to accept the obvious.

With the latest news from Brazil, there is little hope for the world coffee market to see any corrections to what is already a precarious lack of balance in the supply demand situation, and the deficit for the 2015-16 harvest could come in well over 10 to 12 million bags, potentially running an fresh deficit of as high as 15 million bags pending how the new crops will come in from Central America, Colombia, Peru and the key Asian producers India, Indonesia and Vietnam.

And on top of all of this, don’t forget that world consumption is approaching at least 154 million bags by the end of 2015, and the new 2015-16 crop is feeding demand in 2016, which by then could rise to as much as 157 to 158 million bags. Let’s not even get started on the lack of stocks and the potential negative implications and risks all these issues may have for the flowering of the next 2016-17 harvest which is scheduled to start by mid-September … and may the Gods for coffee lovers have mercy on all of us.

Whether a regular coffee lover or roaster, don’t wait to stock up on your favourite beans, it’s time to buy coffee!

Stay tuned for more coffee news from Brazil, we’ll be back soon! Happy coffee drinkingheart

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3 Comments

  • Very much true madam. Here in India the situation is not different from Brazil and rest of the world Coffee producers. The rain which was essential for coffee blossoms in summer was delayed and not sufficient. Added to that this summer we experienced excessive heat. The result was Coffee robusta variety was severely hit. Now we are in the monsoon season of South India, still no sign of normal rain fall. As you have predicted India will produce 10 year low crop, is evident from the current situation. Thanks a lot for your updates. Regards Vishwanath.

  • Wow, you really are going over the top! Who is paying you?

    • For some one calling themselves “Not An Idiot” you clearly have not done your homework. If you think this is “over the top” you don’t know anything about coffee in Brazil. My reports are 100 percent independent and not paid for by anyone, I am not involved in trading or any other market activity, contrary to the kind of reports you obviously are reading.

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