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Re: Broca Update
In Response To: Re: Broca Update ()

Hello and thank you for comment.

I feel like there is more confusion as go deeper into it. Let me summarize.

1) there si less coffee harvested in Brasil than estimated due to various reasons mainly smaller beans and empty cherries
2) Broca reduces export-able quantity by additional at least 20%
3) it is widely assumed that there is no significant stock of older coffee, mostly sold in 2016/2017

From the above, I assume that we will have serious deficit of coffee export from Brasil.
There might be enough of cheap coffee for domestic consumption, however this might actually create pressure to "illegally" export this low quality Broca coffee
There might even be some well hidden stock from previous years, but it will need higher prices to mysteriously reappear on the market.

To me this sounds like a bullish scenario, at least short term...
How much will be missing if all above is close to accurate?
Wild guess: 8-9 mio bags just for the Broca occurrence, in total 15 mio bags compared to original optimistic estimates?
Is increase of couple millions of bags from other origins compensate for this Brasil decrease alone?
How about Asia production?

I think that even though it might not look serious in spreadsheet, actual market forces can use it a background for running prices much higher than current level.
Again I bet some seller may want to delay their offers and speculate on price movement. At least it is the chance for them to push market in such a tight situation.

What you guys think..

JK

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