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By Marcelo Teixeira
NEW YORK, April 14 (Reuters) – The 2023/24 Brazilian coffee crop, whose harvest is about to start, is looking healthy and able to deliver good yields, indicating that a market-consensus view of an output around 65 million 60-kg bags is reasonable, a report said on Friday.
According to Florida-based consultancy Coffee Trading Academy (CTA), whose analyst Igor Bragato toured some coffee areas last week, the Brazilian 2023/24 coffee crop “will not break any records, but it does look to be a substantial improvement over 2022/23 and a very healthy off-year”.
Brazil alternates years of higher and lower arabica coffee production. The 2023/24 crop (July-June) should be an off-year in the biennial cycle, but production is seen rising because last year’s season, an ‘on-year’, was hurt by harsh weather such as drought and frosts.
The fresh Brazilian output is seen as key to replenish stocks worldwide after two years of tightness that boosted benchmark coffee prices.KCc2
Bragato said in the report that the positive situation of fields, with good amount of leaves and good fruit loads in the visited areas, supports CTA’s view of “looser fundamentals moving forward”.
He added that conversations with farmers indicated they are happy with prices and willing to sell the new crop as they harvest it, also taking into consideration the current inverted market – when prices are higher near-term and weaker long-term.
CTA said the outlook indicates that price differentials, or the price premium over futures in coffee trade, are likely to fall going forward.
The report said that there is also good potential for the next crop, the 2024/25, but that will largely depend on the weather going forward.
(Reporting by Marcelo Teixeira; Editing by Emelia Sithole-Matarise)
((marcelo.teixeira@tr.com; +1 332 220 8062; Reuters Messaging: marcelo.teixeira.thomsonreuters.com@reuters.net – https://twitter.com/tx_marcelo))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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