Sao Paolo, 27 February, 2008 - Brazil's 2008-09 coffee crop got off to a rough start in October, but since then the weather has been cooperating nicely for this bumper-crop year.
The problem? Damage done in the October flowering season was severe enough to keep this crop no bigger than the 44.2 million 60-kilogram bags estimated by the government, agronomists said.
"You're looking at losses of around 20% to 30% compared to the highs that everyone was thinking about initially, which were around 50 million bags," said Joel Fahl, an agronomist at the private Agronomy Institute of Campinas in the interior of Sao Paulo state.
Although traders will say Brazil's new coffee crop will be a record-breaker, agronomists at Brazil's main farm cooperatives think otherwise.
That's no surprise, of course, because it is in farmers' interest that supplies remain tight. The tighter the supply, the higher coffee futures can push. As it is, coffee prices are over $1.60 per pound for the May contract on the ICE Futures U.S. exchange despite a sizable Brazilian crop coming on line in the months ahead.
"The problems we had with the flowering season have already taken hold. It doesn't matter now that the weather has been spectacular," said Joaquim Goulart, an agronomist at Cooxupe, Brazil's No. 1 coffee cooperative.
Coffee trees flower from August to early December. The better the flowering, the better chance that tree has to develop the fruits that eventually hold the coffee beans. A lack of rain in those late winter, early fall months led to a lackluster flowering season for the 2008-09 coffee crop, Fahl and others agreed.
Ademar Pena Forte, an agronomist at the Caccer Cooperative in the Cerrado region of Minas Gerais, the leading coffee producing state, said he sticks by the maximum 44.2 million bag figure estimated in January by the National Commodities Supply Corp, or Conab.
A new Conab estimate has not yet been scheduled.
"We trust Conab's numbers," said Gabarito Volpato, an agronomist at the Cocamar farm cooperative in northern Parana.
"The poor flowering season led to losses early on. They were not recoverable. Right now, though, everything in the fields looks really nice," he said.
Brazil is the world's leading coffee producer and exporter. This is the bumper-crop season for Brazilian arabica coffee trees, which have alternating years of high and low productivity.
Last year, Brazil harvested around 33 million bags, though coffee roasters and exporters have put it closer to 36 million bags due to the sheer volume of local consumption and exports.
With exports of around 26 million bags for green and instant coffee products, plus local consumption for 2008 put at around 17 million bags, that doesn't leave much left over if Brazil just really harvests 44 million.
As it is, carry-over stocks from the 2007-08 crop are expected to be around four million bags by the start of June; just enough to meet local and international demand for no more than two months.
Pena Forte said that irrigated areas in the Cerrado region will start harvesting in May, with the bulk of the harvest getting started in June.
Libanio said that some lower elevations of southern Minas Gerais, the leading producer region of the state, will start harvesting as early as May, as well.
The harvest goes until September.