Brazil's coffee exporter sees large but not record crop

Brazil will produce 55.8 million 60-kg bags of coffee in the upcoming harvest, exporter Comexim estimated on Friday, less than what it estimates was a record crop of around 60 million bags two seasons ago. Brazil is the world's top coffee producer and the trade is eagerly awaiting supplies from the 2012/13 harvest which comes in a higher-output year in the up-down biennial cycle which causes output to rise and fall from one year to the next.
"Our and most everyone's expectation is that the approaching crop will ease the tightness," in coffee supplies, trader John Wolthers wrote. New York coffee futures surged above $2 per lb in mid-2010 and have remained there ever since as producing countries fail to keep pace with the growth in demand, especially for fine grades of arabica beans.
The key March arabica coffee contract inched up 0.35 cent to finish at $2.1595 per lb. The government has given an official forecast of 49 million to 52.3 million bags, which by its measure will be a record no matter where output reaches in that range, it says. It said the 2010/11 crop two years ago turned out 48.1 million bags.
Exporters view the government's numbers as conservative and work with numbers a few million bags higher, and the official crop supply agency is rolling out a new forecasting methodology it expects will narrow the gap with private estimates. By Comexim's measure, the next crop will fall short of what it says was record output achieved two seasons ago in the 2010/11 crop year, when it estimates output was close to 60 million bags compared the government's 48.1 million bag figure.
The government's crop supply agency Conab says it is rolling out a change in its crop forecasting methodology which is likely to bring its own numbers closer to those of exporters in the coming seasons. But going by private or public measures, the coffee crop is still expected to be a respectable one, especially in light of the prolonged dry spell it went through at its outset which came on top of a bout of frost.
Separately, Comexim offered an estimate for private and public coffee stocks which it estimated at 22.95 million and 1.79 million bags respectively as of January 1, 2012, giving a total of 24.7 million bags. The government is expected to start offering its 1.4 million bags of 2009 arabica for sale through auctions in the coming weeks.
Co-operatives say an unusually wet January has helped bacterial halo blight disease to spread, causing some losses to the crop in specific spots, but overall it is not seen as a major threat to the crop. Comexim says higher output in states like Espirito Santo, which grows about a quarter of the total crop and relatively small producer Bahia will help make up for sub-optimal output from top coffee state Minas Gerais. Minas alone grows half of the country's coffee. Comexim said arabica production would total 39.6 million bags while robusta output was seen at 16.2 million bags.