MILAN – As expected, Brazil’s National supply agency Conab reduced its estimate for this year’s crop on further evidence of damage from the worst drought in decades. The 2014/15 crop is now pegged at 44.6 millions bags, or 7.8% lower than the initial estimate of 48.34 issued in January.
Despite the on-year cycle for Arabicas, production is expected to be 9.33% lower than last year’s 49.15 million bags.
The Arabica crop is likely to decline by 15.8%, to the drought, tree cropping, the reversal of the two-year cycle in some areas of Minas Gerais (such as Zona da Mata) as well as the frost that hit the state of Parana in 2013.
Robusta (conillon) production, on the other hand, is expected to rebound to 12.33 million bags, up 13.5%) on year thanks to improved productivity and favourable climatic conditions that occurred in the state of Espirito Santo, the country’s largest producer of this crop.
Production is expected to decrease sharply in Minas Gerais (-16.88%) and Parana (-66.97%). Higher production is expected in Espirito Santo (+4.37%), Sao Paulo (+5.58%), Bahia (+10.20%) e Rondonia (+19.75).
In a recent survey, Fundacao Procafe said this year’s crop would drop to 40.1-43.3 million bags.
Swiss coffee trader Volcafe Group, a division of ED&F Man, has recently cut its estimate for the new crop to 45.5 million bags down from a previous outlook of 50.7 million.
July arabica futures on ICE surged 12.60 cents, or 6.8% on Thursday, to settle at $1.9680 per lb.
