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The great Brazil drought drop

From the August 2014 issue.

Consensus is now building that brazil’s harvest will likely fall between 40 – 45 million 60-kilogram bags. Where will the coffee giant’s smallest crop in years leave coffee prices?

It was set up to be Brazil’s best year yet. At this time a year ago, industry bodies were pegging the 2014-15 harvest at 55 – 60 million 60-kilogram bags. The bumper crop was set to pull production figures 

Brazil Coffee Droughtout of a deficit, and into the first surplus the market had seen in five years.

This was until the bad weather reports started coming through.

One by one, analysts from private producer groups, exporters, traders and funds have been lowering their predictions.

Consensus has seen around 15 million bags of coffee disappear since the beginning of the year. The latest forecasts don’t expect more than 40 – 45 million 60-kilogram bags of coffee out of Brazil.

As the physical harvesting peaked across the Brazilian coffee regions at the end of June, mill deliveries brought in a high volume of beans. This wasn’t the good news people were waiting for, as disappointing samples are starting to emerge. While the percentage of defects is always higher in mill deliveries registered during the first month of harvesting, industry officials are saying that the percentage this year is two to three times higher than year-ago comparisons.

“The rains in Brazil were not only too late but could be more damaging than good. There is very little coffee inside. The outside appearances are deceiving,” international commodity analyst Judith Ganes-Chase tells GCR Magazine.

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