I am going to use Safras Mercado production numbers because they are one of the most conservative In forecasting Brazil coffee production.
20/21 Arabica 50.1 Robusta 19.40 total 69.50
Domestic 22.5 I will keep this number constant
Stocks Up 2
21/22 Arabica 34.70 Robusta 21.80 total 56.50
Stocks Down 6.5
22/23 Arabica 35.0 Robusta 23.20 total 58.20
Export Estimate 36.0
If you have been only paying attention to the usual commodity sources for coffee information you are expecting a good crop for 23/24. However if you have been paying attention to a wide variety of reliable Brazilian sources documented with video footage you are aware that while the flowering was good there was a large abortion of fruits, due to drought stress , defoliation and cold temperatures. There is also in fact a precipitation problem in the Cerrado region and many regions were also hit by hailstorms. And contrary to the last few years the Cotillon crop is looking poor and will produce less than a year ago. In fact many involved in the coffee trade are expecting a total crop size similar to this year. I am forecasting for this exercise a 10% increase in Arabica and a !0% decrease in Robusta.
Arabica 38.50 Robusta 21.0 total 59.50
Export Estimate 37.0
The big takeaway for me is that over 3 years Brazil will short ship compared to the 45 min exported in 20/21. 5.0 million in 21/22. 9.0 million in 22/23. And 8.0 million in 23/24. Over 3 years Brazil will have short shipped to the world 22.0 mln bags. Sure some of the numbers are estimated. Play with them if you want but it seems like a lot of coffee has to appear from somewhere to balance this situation out.
And there’s more in 21/ 22 when Brazil exported 40.0 mln bags or 5 mln bags less than the previous year world exports stayed the same. This indicated that world stocks ex Brazil which are never large were reduced 5.0 mln bags. In fact this was most likely the main reason we were unable to start another leg up. Traders Myself included believed exports would drop and the world would feel supplies being pinched. However due to an ample stock situation in Brazil and stocks in other countries that had accumulated during Covid19 prices remained tame as no shortage really occurred. Going forward I expect it to be different.
This is such an extraordinary situation to occur in Brazil 3 back to back crop failures never before happened makes me think $160 Coffee is Nonsense.