Back from Brazil, just in time to see James Taylor and Carole King ROCK Fort Lauderdale last Saturday!
In Brazil, I spent most of last week in Santos at the Wolthers & Associates office, cupping coffees and grading samples of the new incoming crop. This new crop is about 45 days advanced, new crop shipments are already happening now in June and this is quite unusual as normally, new crop shipments should only start by August.
The early crop solves two major problems; the lack of fine cupping coffees in the late season and the supply of the enormous volume of delayed 09/10 crop shipment commitments. These unshipped contracts have been postponed for the first availability of new crop that matches the contracted quality description.
In other words, Brazil will probably break its records in volume of coffee shipments per month on the period June – Dec/10.
2009/10 crop shipments plus the new crop sales will have to squeeze into outbound vessels as soon as possible, be sure to book your space and containers!!! On another note, Brazil just announced that their economy grew 9% in the first quarter of 2010. This number is only matched by China’s economic growth and throws to ground the very conservative 6.5% growth estimate for the year announced earlier in the year by Brazil’s Treasury Secretary Guido Mantega.
This amazing 2nd economic miracle in Brazil seems very sustained, in part by the strength of the internal market, the competitive Agro business and production, the Industrial capacity and also by the newly confirmed hosting of FIFA’s Soccer World Cup in 2014 and The Summer Olympics of 2016 in Rio de Janeiro.
A strong economy in Brazil also means continued coffee consumption growth, actually close to 19 million bags are consumed per year and another 950.000 bags will be needed to complete the 5% demand increase for the next 12 months.
As Brazil runs into the First of July this year with a record low 1 million bags past crop Carryover, the new crop being harvested, will add an expected 55 million bags to serve both exports and internal demand for the next 12 months.
Original Coffee Trade price board
56 million 60 kg bgs July 1rst availability for the 10/2011 crop cycle
20 million bags internal demand
29 million exports
07 million Carryover June 30, 2011
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42 million expected 2011/2012 crop estimate
07 million carryover June 30, 2011
49 million availability for the 2011/2012 crop cycle
21 million internal demand
27 million exports
01 million carry-over June 30. 2012
As seen above, my estimates show a relatively tight supply and demand situation regarding Brazil coffees for the coming 24 months.
60 kg coffee bags used to be loaded on board by port dock workers
The Country we know today as Brazil, was built on coffee and from coffee.The fortunes derived from the coffee production and trade migrated and promoted the Industrial revolution, the banking sector, agricultural expansion and general commerce to the levels we see today. The Coffee museum in Santos is a must see, when you visit the country and by the way, don’t forget to visit Wolthers & Associates just across the street from the museum entrance, they/we serve an ” EXCELLENT Espresso!.
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