Brazilian farmers should produce 53 million 60-kg bags of coffee in 2019, lower than the 63 million bags produced in the previous season due to the off-year in the biennial production cycle, broker and consultancy INTL FCStone said on Wednesday. Despite the fall, production in 2019 in the world's largest coffee exporter would still be significant for an off-year, FCStone said, as most coffee fields in the top producer Minas Gerais state were in good condition.
The consultancy expects output of arabica coffee, a higher quality variety widely used by top coffee brands, to reach 36.9 million bags while robusta coffee production, a type used by the instant coffee industry, was seen at 16.1 million bags. It did not provide comparative numbers for the two types. "The Brazilian crop, even in the negative year in the biennial production cycle, will be large. It will be bigger than any other off-year crop in the past," said Fernando Maximiliano, FCStone coffee analyst, during a presentation at a conference in Sao Paulo organized by Brazil's coffee exporters association Cecafé.
The outlook is unlikely to provide any relief for coffee producers worldwide, which are struggling to make a profit while reference prices hover around the lowest levels in a decade. "It could be bearish for the market if the fall in Brazilian production is unable to eat remaining stocks left from the previous record crop," Maximiliano said.