20 Crops

Alexandre Pikelhaizen | January 24, 2019

From Brazil, Christian Wolthers reports on the current state regarding the inventories and expectations for the next crop:

Touring the Arabica belt for the last two (2) weeks, it is evident that the plantations are in very good health and relatively well loaded for the 2019-2020 crop to start late May 2019. The weather has been more than excellent for the development of the beans and towards a maturation equalization as most Arabica Regions had multiple flowerings. The only area where the maturation may show a strong variation is in the Cerrado Region, but constant rains, ideal temperatures and moderate sunlight exposure could still correct this in case this climatic scenario continues thru the next two (2) months of summer season. The important note regarding productivity and volume is that the Arabica Regions will suffer a noticeable reduction after the 2018/19 “Super Crop “, however due to new plantings, previous pruning and excellent care, the Conilon Areas will boost their volume when compared to the 2018/19 harvest. Another incredible number is the export volume for the Super Crop, more than 38 million bags!

We estimate the planted area in Brazil to have increased to 2.35 million Hectares. Productivity swings from year to year continue;
In the 2018/19 crop cycle, productivity was of 26 bags/60 KG green coffee per Ha, whereas in the 2019/20 cycle, we expect an average 10% decrease to 23.4 bags/60 KG green coffee/Ha. This reduction is quite bigger in the Arabica Regions but inverted to positive in the Conilon areas, thus a smaller overall average decrease in total production.

With these productivity percentages, we see the 2018/19 crop at 62.1 million bags and the next crop will provide 55 million bags.
We also are impressed with the overall quality harvested and the unsold/unshipped inventories are well stored and financed until further need.

Revising numbers:

WD Brazil Coffee Carry-Over July 1st 2018 – 2.0 million 60/Kg Bags

Crop 2018/19 – 61.1 Million 60/Kg bags (harvest May/June 2018 thru Sept/2018 for shipments July/18 thru June/19)
Exports 2018/19 – 30.4 Million 60Kg bags
Internal consumption – 21.5 Million 60Kg/bags
Balance/Carry – 9.2 Million bags

Crop 2019/20 – 55.0 Million 60/Kg bags “Estimate“ (Harvest May/June 2018 thru Sept 2018 for shipments July/18 thru June/19)
Exports 2019/20 – 37.0 Million 60/Kg bags” Estimate“
Internal Consumption – 22.5 Million 60/KG bags
Balance/Carry – (Less 4.5 Million bags)

Overall Balance/Carry July 1st 2020 – 6.7 Million 60/Kg bags

Internal Consumption is expected to grow based on the new government measures.
Sales and shipments of the 2018/19 super crop will reflect stronger exports during the July/19 – June/20 period.

Wolthers Douqué LLC
Christian B Wolthers