Brazilian farmers are expected to produce a record coffee crop in 2020, surpassing a previous all-time high reached in 2018, as output is seen reaching 66.7 million 60-kg bags, Dutch bank Rabobank projected on Thursday.
Rabobank's coffee analyst Guilherme Morya told reporters during an agricultural outlook seminar in Sao Paulo that unfavorable weather in some parts of Brazil's coffee belt, such as dry spells in September and October, would be offset by production from new areas.
Brazil produced 57.6 million bags in 2019 and the previous record was 62.6 million bags according to the bank. Dryer-than-normal weather conditions were seen by Morya as one of the factors behind a recent recovery in arabica coffee prices in New York. Despite the large Brazilian crop expected for next year, he believes the price outlook will remain positive.
"Production is likely to fall in other countries due to lower investment after a prolonged period of low coffee prices," the analyst said, expecting arabica futures in New York to keep an upward trend, reaching a top of $1.22 per pound during 2020.
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