Brazil Coffee Production to Decrease: Daily

Brazil's declining coffee production might lead to a global shortage between 2014-2015.

By William Jones, Contributing Reporter

RIO DE JANEIRO, BRAZIL – The global coffee market will face a shortage for the first time in three years, according to Volcafe LTD, a leading Switzerland-based coffee merchant. Although Brazil is the largest producer of coffee beans on the planet, it is still expected to produce about five million bags less than global demand between 2014 and 2015.

Brazil Coffee Shortage, Rio de Janeiro, Brazil News

The farming techniques used to reap coffee beans in Brazil reduces costs but can also slash productivity, leading to a shortage, photo press image.

Volcafe noted that their data shows Brazil will produce 51 million bags in their next crop, less than the 57.2 million bags it produced in 2013-2014 and less than the 56.8 million bags from 2012.

Despite the fact that Brazil has a potential output of sixty million bags, the country’s decrease in output could potentially tip the worldwide market into a shortage.

On the other hand, both Vietnam and Colombia are expected to increase their production, according to a January 2014 U.S. Department of Agriculture report.

A bag of coffee weighs 132 pounds and Brazil produces two types of bean, arabica and robusta. According to Volcafe, the Brazilian production in 2014-2015 will comprise of 35 million bags of arabica and a robusta output of 16 million bags, compared to 40.7 million bags and 16.5 million bags the year before.

“With a 51 million-bag Brazil crop figure, our 2014-2015 statistical balance becomes a deficit of around five million bags, coming after two years of statistical surplus in 2012-2013 and 2013-2014,” Volcafe said in its report.

Production in Brazil looks likely to cause increasing market pressure due to the farming techniques used to yield the crop, these are known as hard pruning or “skeletonizing,” which harm production output but ultimately “eradicates costs.”

“We have observed a higher-than-expected rate of flower abortion,” Volcafe said. “This disappointing fixation of flowers, in particular in the south of Minas [Gerais state], is due to high productive stress from two large crops in a row, despite textbook weather.”

“This year we observed rates of ‘esqueletamento’ (skeletonizing) of up to seventeen percent in the main arabica areas, much higher than normal,” Volcafe added. “This hard pruning activity is still ongoing, as we observed preparations for more of this cost-saving technique.”

Brazil’s coffee harvests have broken records in recent years. Other countries have also been boosting production, but worldwide demand in previous years has not kept up. In November 2013, arabica coffee beans were being traded at seven-year lows and Brazilian coffee farmers were operating at a loss. Coffee production in Brazil is responsible for about a third of the world’s supply of the popular bean.

Read more (in Portuguese).

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One Response to "Brazil Coffee Production to Decrease: Daily"

  1. Pingback: Brazil Coffee Exports Up in Volume, Down in Revenues: Daily Update | The Rio Times | Brazil News

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