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Brazil's 2023/24 Coffee Crop Will Grow Only Modestly, Says Taka Insights

By Dave Simpson

Brazil, the world's top coffee producer, is set to have a larger crop in 2023/24 (July-June), but the increase will be modest and far from a record production that some analysts have expected, commodity intelligence company Taka Insights has said.

Details

The company, which produces daily crop prediction models using remote sensoring and data from weather stations, projected Brazil's 2023/24 (July-June) arabica coffee production at 40.68 million 60-kg bags, a small increase from the 2022/23 crop seen at 38.48 million bags that is currently being harvested.

"This might seem surprising to some, who anticipated a much greater recovery due to a few months of well-above-average rainfall, but the NDVI clearly shows the extreme deficit in moisture at the start of the vegetative growth cycle," said the company in a note sent to Reuters.

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NDVI stands for Normalized Difference Vegetation Index, a way of measuring green vegetation of trees that is considered efficient to predict production.

Soft commodities analyst Judith Ganes, a co-founder of Taka Insights coffee program, said the data collection is now covering close to 75% of the arabica area in Brazil with daily monitoring.

She said that arabica trees in Brazil are still recovering from a harsh 2021 drought and frosts, so are unable to produce a large crop such as the record output seen in 2020/21 cycle.

Arabica coffee accounts for around two-thirds of total production, with the rest coming from robusta coffee trees.

Taka Insights is still working on mapping the robusta share of the Brazilian coffee production.

USDA Sees Brazil Coffee Crop, Exports Up In 2022/23

The above news was followed by news that the United States Department of Agriculture (USDA) expects an 11% production increase for the 2022/23 (July-June) coffee crop in Brazil, the world's top grower, plus an increase in exports.

In its first projection for the new Brazilian crop, the USDA said total production should reach 64.3 million 60-kg bags, which is one of the highest estimates for the country released so far by independent analysts. Read full storyRead full story

If correct, such a crop could give some relief to the current market tightness that have pushed coffee prices KCc1around the world to multi-year highs.

The US government agency said Brazil will produce 41.5 million bags of arabica coffee, the milder type used by coffee chains around the world, such as Starbucks SBUX.O and Restaurant Brands International's QSR.TO Tim HortonsThat is a 14% increase over last year, when a harsh drought and frosts hurt production. Those conditions, it said, prevented an even bigger arabica production.

The USDA said Brazil will have a very good robusta coffee crop, the type mostly used to make instant coffee, estimating total output at a record of 22.8 million bags.

"Robusta production... should benefit from above-average weather conditions and good crop management, thus resulting in an excellent output," it said.

Total exports were seen rising 3% in 2022/23 to 39.05 million bags.

The USDA has adjusted upwards its view for the previous crop to 58.1 million bags, 1.8 million bags more, saying it considered updated supply/demand information from the industry.

The agency projected coffee consumption in Brazil, the world's second-largest user after the United States, at 22.45 million bags in 2022/23, only marginally higher than the previous season, saying high prices and modest economic growth created difficulties for increased consumption.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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