Brazil Coffee Information: will the reduction of Brazilian coffee production in 2021 affect the global coffee supply chain?

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According to the latest news released by Brazilian consultancy Safras, there is plenty of Rain Water in Brazil's coffee-producing areas at the beginning of March, which means there will be no drought in Brazil's coffee-producing areas this year. However, last year, Minas Gerais, the main coffee producing area of Arabica, was "left behind" by drought, and the harvest of Arabica coffee is expected to decrease by 17% in the 22nd season of 2021 compared with the same period. However, the drought has little impact on the main producing areas of Rob in Brazil, Staespirito Santo and Randonia, and the harvest of Brazilian Robusta coffee is expected to increase by 18% in the 2021 season compared with the same period.

Safras also said that if Brazil, as the world's largest coffee producer and exporter, produces less than 60 million bags of Arabica coffee in the 22nd quarter of 2021, it will have an impact not only on Brazil's domestic coffee supply chain, but even on the global coffee supply chain.

Due to the influence of COVID-19, coffee consumption in Brazil rose 1.4% to 21.2 million bags in 2020 compared with the same period in 2019. Of this total, instant coffee increased by 3.18% to 943000 bags, while ground coffee increased by 1.26% to 20.26 million bags. According to the domestic consumption of Brazilian coffee in 2020 and the continuation of COVID-19, if the production of Brazilian coffee beans is reduced in the 2021, 22nd production season, apart from the quantity of coffee beans supplied to Brazil, the total amount of remaining coffee beans is far from enough to be supplied to world coffee traders, so the price of Brazilian Arabica coffee beans is expected to continue to rise.

According to Safras's monthly survey, as of March 9, 2021, Brazilian coffee farmers had sold 87% of their coffee beans in the new season, an increase of 4% over the previous month, and the market maintained a steady sales flow, which was flat compared with sales in the same period. Sales of Arabica coffee accounted for 86% of the expected output, up from 85% in the same period last year and 84% of the historical average, while sales of Brazilian robusta coffee accounted for 91% of the expected production. higher than 90% in the same period last year and 88% of the historical average.

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