By Marvin G. Perez
(Bloomberg) -- Brazil, the world’s top producer and exporter of arabica coffee, faces a crop decline of as much as 34% after a drought ravaged the nation’s biggest-growing state, Ecom Trading said after a tour of fields. Output may fall to 33 million to 34 million bags next year from 50 million in 2020, Jorge Esteve, a vice president at Empresa Interagricola SA, the Brazilian unit of Ecom Trading, one of the world’s biggest coffee traders, said in a telephone interview.
Esteve last week visited Minas Gerais state, the top grower of the beans favored by Starbucks Corp. Crops in the heart of the state “look horrible, ugly,” compounding shrinking output during the off-year in a biennial production cycle. Arabica coffee for March delivery jumped 3.4% to close at $1.2105 a pound on ICE Futures U.S. in New York, the biggest gain in almost two weeks. The price has climbed 28% from this year’s low of 94.55 cents on June 15.
The robusta-coffee crop, grown in other states, “looks very good,” Esteve said from Santos. Output of the beans widely used in instant beverages may increase to 21.5 million to 22 million bags from 20 million this year, he said. A bag weighs 60 kilograms or 132 pounds.
« Back to index