Coffee Traders' Forum - A Discussion about Coffee Futures Trading

Coffee Traders Discussion Forum

Coffee Traders' Forum

CEPEA Comments on CONAB Projections

CEPEA Says CONAB 2017-2018 Coffee Crop Estimate Too Low

CoffeeNetwork (New York) – Brazil’s Center of Advanced Studies in Applied Economics (CEPEA) has forecast Brazil’s 2017-2018 crop to be between 48-50 million 60-kg bags. In their report, they noted that the forecast released by CONAB on September 21st, pegging production at 44.77 million bags was too low.

CEPEA pegs Arabica production at 34.07 million bags, down 21.5% from the previous crop, due to the negative biennial cycle in Brazil. Besides, smaller screen and higher incidence of coffee berry borer in Arabica beans reduced productivity as well and resulted in low acceptance by purchasers.

On the other hand, CEPEA sees this Robusta season being larger than the previous one, because of better weather conditions during crop development. According to Conab, production should total 10.7 million bags this seasons, above the 7.98 million bags in the 2016/17 crop and similar to the 11 million bags expected by the agents consulted by Cepea.

Although initial forecasts point to a larger 2017/18 crop than estimates of Conab, there still is a lot of coffee to be processed and, with the screen and quality problems found at Arabica beans, this final number may be reduced.

Alexis Rubinstein