May 2013 C&CI • Brazil • 23
The US Department of Agriculture, which has yet to issue a forecast for the 2013- 2014 harvest, has maintained its figure for production in 2012-2013 at 55.9 million bags compared to a figure of 49.2 million bags in the 2011-2012 cycle. However, a number of leading market analysts have started to bring their figures down. Brazilian consultant Safras & Mercado said the harvest did not reach more than 54 million bags, and French banking and financial services company Societe Generale puts the final figure for 2012- 2013 at 53.7 million bags. So where does this put the new crop?
Much is at stake, not just for the market but for the Brazilian coffee industry at large, and officials are watching not just the actual size of the harvest, but also indicators of carry-over stocks and local consumption
“The crop is doing well but 50 million is a dream for an off-year, just like the idea of 56-60 million for an on-year,” said Luiz Suplicy Hafers, a producer himself and current director of the coffee department of the Brazilian Rural Society, or the SRB. Mr Hafers believes that the new crop may reach a level of 48-49 million bags, “which would be sensational” for an off- year, but he doesn’t believe that the last harvest was bigger than 52 million bags. It’s no secret the 2012-2013 harvest in Brazil got off to a less than ideal start. Just as the harvesting process started in earnest, very heavy unseasonal rains pounded coffee regions and led to large volumes of ripe cherries falling to the ground and fermenting, leading to significant quality damage and some crop losses which have yet to be calculated.
Slow pace of exports
raises questions The figures that support the lower estimates are supported by the unusually slow pace of exports. Exports from June through February were down 6.4 per cent to 18.04 million bags from 19.3 million bags in the 2011-2013 cycle, the Brazilian Coffee Exporters Council, Cecafe, reported.
Even more disturbing to some in the market is that 2012-2013 coffee exports from June through February were down 18 per cent, or over 4 million bags, from the total volume of 22.1 million bags exported
Luis Suplicy Hafers: new crop may reach a level of 48-49 million bags
John Wolthers: last crop was not of particularly high quality
in the same period in the 2010-2011 cycle. The question is, if production reached the level claimed in some higher estimates, where is all that coffee?
Analysts and traders agree that the slow pace of exports is partly due to the fact that there has been a steady build-up in stocks held internally in Brazil, but they disagree as to how much, just as the size of carry- over stocks remain disputed. “A record 2012-2013 crop in Brazil of 50.8 million bags, together with the upcoming 2013-2014 harvest, is weighing on the market. Total exports by Brazil in 2012 were lower than the previous year, suggesting a build‐up of stocks in Brazil,” said the ICO.
How much stock
is being held over? Many private traders, such as Coexim, believe the combination of carry-over stocks and coffee from the 2012-2013
crop currently held in private hands could be over 4 million bags. The USDA said the stock balance at the end of the 2011-2012 harvest was a mere 2.283 million bags and total carry-over stocks by the end of the 2012-2013 cycle was pegged at 2.926 million bags.
As replanting has gradually boosted the average tree density in producing regions, the balance between the newer and older trees has led to greater overall stability, with states such as Parana and Espirito Santo producing bigger crops of Arabica in off-years
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