In its most recent report, BMI Research, a FitchGroup company, has revised up considerably its forecast for Brazil’s coffee crop from 46.3mn bags to 49.5mn bags. This represents a 9.3 percent year-on-year increase in production.
“We now hold a more sanguine view on coffee output within the country – says the report – as fertiliser application rates have been high over the last few months, while timely rains in February and March will help boost yields.”
The major factor behind strong Brazilian production in 2015/16 will be very good yields, the report adds.
“Farmers were able to take advantage of very strong coffee prices last year, as a significant drought in Brazil damaged coffee plants and stoked supply fears, which led to a major spike in global prices.
High prices have subsequently enabled farmers to increase their fertiliser application, which has led to good growth in coffee plants.
Favourable rains over the key growing months (February and March) have also bolstered the outlook for Brazilian coffee production.
A number of firms that cover Brazilian coffee production have raised their forecasts for the 2015/16 crop, though Conab continues to expect output in the 44.1mn-46.6mn bag range.
The head of Brazil’s Coffee Producers group has argued that Brazil’s coffee crop is being exaggerated in an attempt to keep global prices low. We believe that this is false and expect the Brazilian coffee crop to post strong y-o-y growth.”
