The coffee harvest in Brazil, the world's largest producer, has progressed quicker than normal this year, reaching around 60% for arabica fields and around 80% for robusta areas, as reported yields remained smaller than expected.
According to analysts and agronomists, drier than normal weather, and above average temperatures led to quicker field work while also hurting plants' health, which will make the final crop smaller than projected.
Smaller Robusta Crop
Brazil's exporters group Cecafe said the market consensus is for a robusta crop 10% smaller than initially thought, while arabica production could be 5% smaller. Consultancy Safras & Mercado said it might cut its estimate for robusta by between 8% and 14%. It did not provide a view for arabica, although recognizing bean sizes are small.
"There is no doubt anymore that there are problems. What people discuss now is how big it is. It will depend on the region," said Brazilian broker Eduardo Carvalhaes.
At least two farmer unions have released statements about production shortfalls. The Jaguare Rural Union, in the robusta producing state of Espirito Santo, said local production could fall as much as 35%. Another union in Garca, Sao Paulo state, estimated losses of around 30%.
Traders usually view those statements from groups linked to farmers as exaggerated.
A broker in Minas Gerais state said bean sizes have improved recently as the harvest advanced, but price premiums for high-quality, large beans, are very high at the moment.
'Crucial To Monitor'
"It will be crucial to monitor the situation in the coming weeks," said Rabobank.
Coffee trees at highlands suffered less, but crops at lower altitude faced increased heat, so beans did not grew well, said agronomist Jonas Ferraresso, which advises several farms in Sao Paulo and Minas Gerais states. He believes overall losses for arabica might be around 10%.
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