The Brazilian Harvest
Basically, the whole Brazilian coffee belt from Parana through Sao Paulo, Minas Gerais, Espirito Santo and Bahia coffees are being harvested, prepared and stored. Maybe, this early full harvest and continental sized activity is what made mainstream Brazilian coffees of the current crop so attractive in differential. Another reason may have been the Mild and Other Mild high coffee prices and evident shortage that gave Brazilians a chance to gain new market shares throughout Europe, North America and Japan.
This crop underway is the lower yield crop. Expectations in volume are around the 43 million bags. Logistics for harvesting, preparation and drying is promoting quality and an increase of full washed and pulped natural preparations.
Producers are washing and pulping as much coffee as they can handle. The trade is also showing increased demand by bidding up in price for future delivery of these coffees.
The reality of new sales and increased demand for these preparations is more than a promise and many roasters from abroad have already committed to include these coffees in their blends. It is definitely new market share, at least for the August December arrivals to the Northern hemisphere.
The washed and pulped preparation coffees are the first to be picked in Brazil. This year they will be ready for shipment from the 2nd half of July onwards. By November in the same year, most are already at destination and blended into mainstream, premium and specialty blends.
My estimate for the numbers out Brazil starting July 01st 2009 through June 30th 2010 are:
7.000.000 Crop 08/09 carry over
43.000.000 Crop 09/10
49.000.000 Total availability for 09/10 crop cycle.
(19.800.000) Internal Brazilian Consumption
(29.000.000) Exports
(47.800.000) Total demand
1.200.000 60kg/bags balance carries over on July first 2010 prior to the new crop for 2010/11.
This scenario is quite tight for the next 12 months. It will take lesser exports to loosen a bit the tightness as the reduction of internal Brazilian market demand is not expected.
From our office in Colombia, Wolthers, Vittrup & Associates, we have seen the differentials reduce this week. Supremos were traded at + 64 FOB and + 58 for UGQ’s. The Mitaca harvest has shown more availability and placed more coffees into the supply pipeline.
From Guatemala, Wolthers, Vittrup & Associates informs that prices still at + 44 this week, harvest is completely over and a few areas/producers are still holding some inventory of high grown coffees for later sales and shipments.
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