April 10 (Reuters) – The new coffee crop (2023/24) in the world’s largest producer and exporter Brazil was projected on Monday to reach 66.6 million 60-kg bags, or a 13% increase over the previous crop, according to estimates released by consultancy Safras & Mercado.
Safras projects that Brazil’s arabica coffee production will grow 21% in 2023/24 versus the previous crop to 43.5 million bags, while it sees robusta coffee output growing only 1% to 23.15 million bags.
Arabica coffee is the milder variety preferred by high-end coffee chains such as Starbucks, while robusta coffee is mostly used to make instant coffee.
The consultancy had previously used a range between 65 and 67.1 for the crop. It said the fact the new estimate is closer to the upper end of the range reflects positive weather in recent months in Brazil for the development of the crop.
Brazil’s production is seen by traders as key to determine future prices. The market expects a better crop to reduce some of the supply tightness seen in the last two years.
Safras’ number is in line with a Reuters poll released earlier this year where brokers and analysts saw a crop of 67.1 million 60 kg bags, up from a median estimate of 61.5 million bags for the 2022/23 crop.
Broker StoneX sees a smaller crop at 62.3 million bags.
Safras said that Brazil’s new crop will allow for partial recomposition of stocks and might impact prices negatively.
It expects the country to export 44 million bags in 2023/24, 21% more than in the previous crop.
Source: nasdaq