The Instituto Brasileiro de Geografia e Estatística weighed into the fresh debate on the Brazilian coffee crop by raising its production estimate – although thanks to extra area rather than improved ideas for yield.
The IBGE, the government’s official statistics institute, nudged its forecast for the Brazilian coffee crop some 800,000 bags higher to 44.2m bags (2.7m tonnes).
The estimate comes amid a renewed debate on Brazilian coffee output, after Procafe researchers last week said the crop would end up 20-30% below their March forecast of about 41m-42m bags which was already among the lowest in the market.
Procafe cited the prevalence of small-size beans this year, which meant that more were needed to fill a 60-kilogramme sack.
While the prospect of a harvest that low has doubted by many observers, ideas of a crop above 50m bags, as expected by the likes of Mercon and the US Department of Agriculture, are also being viewed with increasing scepticism.
Ideas of a crop of about 45m-46m bags are “more generally accepted by the trade”, said Jack Scoville at broker Price Futures.
Arabica vs robusta
The IBGE said that its upgrade was nearly all down to an increase in the estimate for Brazil’s coffee area, with the yield figure upgraded by 0.1%.
However, unlike some other commentators, it was relatively upbeat in the proportion of arabica coffee in the harvest, upgrading the crop to 33.4m bags, while trimming to 10.8m bags its idea of robusta production.
The institute said that an its improved estimate for arabica was “mainly influenced” by Sao Paulo, the second-ranked producing state for the variety, which was seen reaping a 218,200-tonne (3.64m-bag) harvest.
The figure is still below the 3.83m bags at which Conab, the official Brazilian crop bureau, estimates the Sao Paulo crop, out of a domestic total it pegs at 32.9m bags.
“The improvement in market prices of arabica coffee,” for much of last year, “encouraged increased investment in plantations”, the institute said.
However, for robusta, the IBGE highlighted reduced ideas of the harvest in Espirito Santo, the top producing state, which has “suffered drought in several growing regions”.
The data come amid a revival in coffee prices, encouraged by the curtailed expectations for Brazilian production, and by technical factors, with futures in the last session breaking above a series of key moving averages.
Arabica coffee for September stood 2.3% higher at 136.50 cents a pound in lunchtime deals in New York.