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Brazil’s 2015-16 harvest drops

From the November 2015 issue.

Consensus is building for Brazil’s 2015-16 crop to end at between 44 and 45 million 60-kilogram bags. with analysts noting that local stocks are nearly depleted, what could a new Brazil deficit mean for the market?

Brazil’s current coffee crop is not looking good. While some players in the market dispute just how bad the situation is, a more severe deficit than previously anticipated is brewing for buyers and consumers ahead of the key roaster season, which began in the last quarter of the year.

Since the new crop started to reach mills and exporters in earnest as of late July, mounting evidence has emerged that confirms not only a significant drop in the overall crop, but also a sharply reduced average bean size.

“Look at this, it’s terrible, it’s the smallest beans we have ever harvested here,” says Moacir Aga Neto of the Cerrado Coffee Growers Federation, showing a sample of new crop during a visit to Cerrado by GCR Magazine in late July.

With a disturbingly large share of black and hollow beans, the sample is a sad sight for coffee lovers, with most of the beans in the sample not much bigger than a peppercorn.

Based in the Minas Gerais coffee region, the Cerrado harvest is running six weeks late as the drought last year delayed the main flowering until the very end of October, and that was before the dry spell in January, which reduced the bean size.

Producers across the region are expecting the final harvest result to be between 20 and 30 per cent below last year and the final volume from the region may not even surpass 4.5 million 60-kilogram bags, says Aga Neto. This compares to the region’s average harvest in a season with regular weather of at least 6 million bags.

Travelling through the Brazilian coffee belt from Cerrado down to the Southern Minas coffee town of Guaxupe, the outlook doesn’t improve much.

Home to the Cooxupe cooperative with more than 11,000 producer members, Cooxupe is by far the biggest coffee cooperative in the world, handling between 5 million and 6 million bags in an average crop cycle –a volume that equals that of Costa Rica, El Salvador and Guatemala combined.

“It’s still too early to make a final evaluation, but the harvest is delayed and there is no doubt that the drought has had an impact,” says Carlos Paulino da Costa, President of the Cooxupe cooperative.

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