Brazil Arabica-Coffee Crop Set to Drop on Adverse Weather: Marex

(Bloomberg) -- Arabica-bean output in Brazil’s main producing areas is expected to slide 30% to 50% this year after excessive heat and scant rainfall, Marex Solutions says in a report after its team visited the main coffee regions in December.
• Harsh weather comes as the crop enters a tree-pruning period and the lower-yielding half of a biennial cycle
• One of the areas most affected by weather issues is South of Minas Gerais, which accounts for about 40% of nation’s arabica beans
o Marex sees a potential year-on-year decrease of at least 35%
o Exception is the part of the crop that was pruned back in 2019, which has endured the adverse weather and appears set to produce well in 2021
• Matas de Minas, which accounts for ~17% of the nation’s arabica, may drop 40% y/y, mostly due to the on-off crop cycle
• Production in Mogiana Paulista, which contributes 13% of arabica output, may fall by at least 50% after adverse weather, Marex says
• For Cerrado, which also represents 13% of Brazil’s arabica crop, Marex sees potential for the harvest to drop by at least 30%, even as irrigation prevented extreme losses
• Robusta-coffee production is set to increase 10% to 15% in the 2021 harvest versus 2020, Marex says
• Marex’s team visited Brazil coffee belt in the first two weeks of December