The Brazilian Coffee Information Agency predicts that the total output of coffee in Brazil in the new season in 2021 will be 52.01 million bags.
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Since 2021 is a biennial coffee production cycle in Brazil, coupled with the dry season in Brazil in 2020, global agencies have predicted coffee production in Brazil in the 2021 / 22 season. The average total coffee production in Brazil is expected to be 52.01 million bags (60 kg / bag).
The production of Brazilian Arabica coffee beans and Robusta coffee is expected to be as follows:
Minas Gerais, Brazil's main Arabica coffee producing region, was the worst affected by drought last year, and its production is expected to drop by 42% this year. Another Brazilian Labica producing area has also been affected by the drought, but it is not as serious as Minas Gerais. Agencies forecast an average of 32.22 million bags of Brazilian Arabica coffee production, a 21% decline in production compared with the same period.
On the contrary, the main producing areas of Robusta are just the opposite. Last year's drought had no impact on the two major Robusta producing areas of Bahia and Esp í rito Santo, coupled with crop improvement and careful cultivation. The average output of Brazilian robusta coffee predicted by various institutions is 19.8 million bags, an increase of 16% over the same period.
Declining coffee production in Brazil and economic instability caused by COVID-19
The price of Arabica coffee beans in Brazil will continue to rise in 2021!
As Brazil begins to enter winter, COVID-19 tends to deteriorate again. On March 19th, Brazil reported 90570 new cases in a single day, the highest number since the COVID-19. It is the deterioration of the epidemic and economic uncertainty that has led to the depreciation of the Brazilian currency, the real, which will push up the spot price of Brazilian coffee. In March this year, the spot price of Arabica coffee in Brazil reached a record 740 reais per bag (US $134 per bag), and the upward trend is expected to continue.
As Brazil's domestic coffee consumption increases, will Brazil's Arabica be undersupplied to the market?
According to the Brazilian Coffee Industry Association, a total of 21.2 million bags of coffee were consumed in Brazil between November 2019 and October 2020, up slightly from 20.9 million the previous year. The market predicts that demand for high-quality Arabica coffee may increase further in the future as more and more people try to drink coffee at home.
If there is an increase in demand for Arabica coffee beans in Brazil, coupled with a reduction in the production of Brazilian Arabica coffee beans in the 2021, 22nd quarter, this will lead to the elimination of Arabica coffee beans supplied to Brazil itself. The remaining quantity is far from enough for world coffee traders.
In early March, Brazil pre-sold 28% of the coffee produced in the 22nd quarter of 2021.
Brazil had pre-sold 28% of this year's coffee production as of March 10, up from 18% in the same period last year, according to Safras & Consultoria. The agency also said that the high percentage of sales this year is mainly due to the serious reduction in production, especially in Arabica coffee, where the pre-sale of Brazilian Arabica coffee has reached 35%.
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