Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Availability and exports of coffee in the next 36 months.
If we look at ICO shipments from October2016 to July2017, we have an increase of 5.6 million bags, due to higher exports from Indonesia, Honduras, Colombia, Uganda, Per, Guatemala, and we had smaller exports from Brazil, Vietnam , CĂ´te d'Ivoire etc., follow the link to check the general context: http://www.ico.org/prices/m1-exports.pdf
However, these larger exports are smaller than the growth of visible stocks, so we can deduce that consumption in importing countries is increasing.
Brazil should close October 2016 to September 2017 (OIC base), with exports of less than 31.50 million bags, less than the 36 million that had been exporting in the same period in 2014/15 and 2015/16, but we should remember that Brazil's harvest in 2016/2017 was considered one of the largest in history, and in addition, the Brazilian Government sold all its coffee stock, 1.60 million bags between September 2016 and March 2017, which helped to create supply of coffee in the Brazilian market, today the inventories are ZERO.
Currently it is clear that we hardly have stocks of coffee from past crops in Brazil, just visit the warehouses and see the availability of coffee from these crops.
CONAB announced that Brazilian private inventories as of March 31, 2017 were only 9,866,061 bags, so these stocks had to support exports and domestic consumption in Brazil in the months of April, May and June.
The total volume found in the collection of private coffee inventories on 3/31/2017, of 9,866,061 bags, represents a negative variation of 27.4% in relation to the survey carried out in 2016.
Another important figure in this count of private stocks is that there was a decrease of 3.70 million bags compared to 03/31/2016, so adding with the coffee sold by the Brazilian Government, we have a disappearance of 5.30 million bags of Brazilian (government + private) inventories, certainly those who pointed out fanciful numbers for the Brazilian harvest in 2016/17 should have some explanation to give.
The 2017/18 crop in Brazil, which ended now, is much smaller than expected by all, I think CONAB is even slightly optimistic in its numbers.
By making a simple bill, using the export average of July + August of the years 2014 and 2015 (6,132 and 5,785 = average 5,585 million), against exports in the same period in 2017 (4,238 million), the fall in exports is scary, minus 28.875% of exports.
Therefore, Brazil's exports this year will be small.
If we apply a Cartesian reasoning, the exports of 2014 and 2015 were 36 million bags, if we decrease 28.875%, Brazil's exports could be only 25.60 million bags.
Then we will have little availability of coffee until the new crop of Brazil, which will only come from July 2018, as we are practically in October and have not yet bloomed, so do not expect to change the nature and have coffee available before the deadline. maturation and drying of the coffee beans.
Yesterday, in a meeting in GUAXUPĂ‰, Prof. JosĂ© Donizeti Alves, master of plant physiology at the Federal University of Lavras, said that the Brazilian harvest potential for the 2018/19 crop will be between 50/52 million bags.
I know it is premature to say how much the 2018/19 harvest will be, but we who follow the day-to-day of coffee plantations, observing climate, sun, rain, temperatures, cultural practices, prunings etc, we know that the great harvest of 2018 / 19 has already left, because in many important producing cities were almost 110 days of drought.
In the wathsapp networks, a statement from Prof. Luis Carlos Molion, climatologist, declaring that the southeastern region of Brazil is under the effect of La Nina, which should persist until March and April 2019, when we will have rains below normal.
His concern is the successive droughts of several years with the cumulative effects on the coffee park.
So I think that the "LEADERS" of the Brazilian coffee industry should manifest itself, because if Professor Molion's forecasts become reality, Brazil will export much below the average in the next 36 months because we have a small harvest in 2017/18, a harvest with potential of 50/52 million in 2018/19 and another crop of low biannuality in 2019/2020, the last two with possible effects of La Nina
It is very important for CONAB to carry out an extensive and rigorous inventory work on March 31st, 2018, since the inventory survey will indicate what it actually harvested from Brazil, it is not forecast, it is called DERIVED SAFRA. , actual stock more exportation and domestic consumption, deducts the stock of the previous period and finds REAL PRODUCTION.
In this way, with a real survey of Brazil's production, we can challenge the fanciful crops mentioned in the international coffee market.
Anyway, planning is necessary.
The Brazilian Government, with its apathetic coffee policy, annually wastes billions of dollars in revenues from coffee exports.
The reflection of this political coffee policy contributes to the world producers are in poverty.
If we correct the price of coffee by the American IPC when the International Coffee Agreement was in effect, the average equivalent to 1.30 USD on 01 January 1982 would be 3.41 USD on 27 September 20
In short, Brazil is a country with too many mentecaptos.
From the Latin mente captus (deprived of intelligence).