Brazil coffee crop seen up 16% as trees show mild recovery

Brazil is expected to produce 63.2 million bags of coffee in the 2022/23 season, a 16.6% increase over the previous one, as trees show a relative recovery after last year’s frosts and drought thanks to better crop care and good weather, a top trader said.

Coffee exporter Comexim, one of the biggest in the country that is the largest coffee producer and exporter, said in a report that the logistics situation is improving as booking allocations in ships and container availability expand, but freight rates continue to be costly.

Comexim sees Brazilian farmers producing 41.1 million 60-kg bags of arabica coffee in the new season versus 35.2 million bags in 2021/22. Robusta production was projected at 22.1 million bags from 18.9 million bags in 2021/22.

“Adverse weather has without a doubt impacted the max potential for this upcoming crop, and while we would not quite categorize it as a recovery, good agricultural practices coupled with excellent farm-gate prices have managed to avert the worst case scenario,” the report said.

Comexim’s estimate is among the largest so far for the new Brazilian crop. Government agency Conab projects 55.7 million bags.

Brazil was hit by the harshest drought in 90 years in 2021 and coffee fields saw the coldest temperatures in 40 years, which killed thousand of trees.

Above-average rains since November, however, have improved the situation.

“We recognize the wide-ranging forecasts that have recently been circulating in the market, but following our extensive field visits and surveys, this is the conclusion we have reached,” Comexim said.

Despite the relative good production, the trader sees the market remaining very tight, particularly in Brazil. It projects carry-over stocks of only 800,000 bags from the current to the new crop, and end-stocks of 1.5 million bags after the next season.

(Reporting by Marcelo Teixeira; Editing by Sandra Maler)