New York / São Paulo — Coffee experts working on the commodity exchange twisted narrowly in Minas Gerais, Brazil, checking the outlook for crops in 2022, just as prices approached their highest levels in 10 years. I’m on the road.
This year was a difficult year for Brazil, the world’s largest producer of coffee. Prices soared after drought and subsequent frost destroyed 20% of coffee trees, damaging future production. So far, crop researchers have made broad estimates of the 2022 harvest, but so far traders are still betting on crops that aren’t fruitful.
People walking in the fields will find the truth between now and the end of January. This is the best time to evaluate crops.
Ryan Delany, Chief Analyst at Coffee Trading Academy LLC, based in the United States, said:
ICE’s arabica coffee futures rose more than 90% this year after drought, frost and a global shortage of containers hindered transportation. Due to soaring prices, farmers in Brazil, Colombia and elsewhere have made the delivery of sold coffee the default.
During the tour, experts count the pinhead cherries on the branches and come up with more detailed predictions. So far, the quotes released are very different.
Judy Ganes, a soft commodity analyst who recently worked with analyst Shawn Hackett in Brazil, estimated Brazil’s arabica production to be around 36 million bags. This is one of the smallest forecasts on the market.
Gaines says that the health of tree plants has been compromised by drought and frost, something that others haven’t fully explained. She expects Brazil’s total yield (including Robasta varieties) to be 55 million bags. This is far from the record yield in 2020, which reached the “previous year” yield of about 70 million bags before the biennial production cycle.
Brazilian coffee farmer Jonas Ferraresso says that after the rain in October, flowering was widespread, but the conversion to fruit was less than usual.
“Many trees have developed new leaves on their branches instead of berries, which is probably an abnormal development associated with a severe drought earlier this year,” he said.
Others are more positive.
Rabobank, which specializes in agricultural finance, expects to harvest 66.5 million bags not far from the record, and such production will generate a surplus of 3 million bags worldwide in 2022, less than $ 2 per pound. He added that it would reduce the price. Coffee production is 63.1 million bags.
Paulo Almerin manages a 220 hectare farm in the Patrocinio region of Minas Gerais, where the frost was strongest. He said about 20% of his vineyards were hit by cold waves and will not be produced next year, but the rest were unaffected.
“At least on my farm, the flowering is good and the conversion to cherries looks good,” he said.
By Marcelo Teixeira and Roberto Samora