Coffee farmer co-op Cooxupé, Brazil's largest coffee exporter, expects this year's crop to produce a good amount of high-quality beans due to favorable weather conditions, its president Carlos Augusto Rodrigues de Melo said on Thursday.
Melo said most producing regions received above-average rains this year, providing trees with ample moisture that will lead to larger beans. The size of beans is a critical aspect regarding quality: the larger, the better.
The situation is a contrast to last year when Brazil, the world's largest producer and exporter, harvested a generally poor-quality crop due to adverse weather conditions. A smaller offer of export-quality beans was one factor behind the New York coffee rally late last year.
"The rains are not going to increase the size of the crop much, because the fruits were formed back last year after flowering, but they would improve quality," Melo said.
Arabica coffee prices in New York gained around 50% late last year, and returned basically all those gains this year, in an unusual movement.
Melo said Cooxupé's farmers took the opportunity to hedge more than 40% of the crop to be harvested this year, and are in no rush to sell more at the moment.
"Farmers basically guaranteed their costs (with forward sales). Now they will have time to sell the rest slowly, along the year," he said.
Brazil in 2020 returns to the "on-year" on its biennial coffee production cycle, which alternates between years of low and high output. Many analysts expect record production near 70 million bags in 2020.
Cooxupé does not see that. Melo said the co-op's internal projections put the crop slightly below the record set in 2018, when the country produced 61.7 million bags, according to the government estimate. The Brazilian government sees this year's crop at 59.6 million bags.