Brazil 2018/19 Coffee Survey
Market estimates are inflated by the large amount of exports that came from Brazil, therefore our estimates sit marginally below market consensus.
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After travelling 5,000km through the Brazilian coffee heartland and visiting over 250 farms, we arrive at a crop estimate of 56.8m bags, of which 41m bags are arabica and 15.8m bags are conillon. This is in sharp contrast to market expectations of a >60m-bag crop just a few weeks ago. We now believe that the industry average has been coming down in the last few weeks… and it is likely to continue to do so before the harvest.
Following a very mild off-cycle last year, it is only normal to expect a less-than-perfect on-cycle this year. Fundamentals, however, seem to be in the back seat for the time being. Over 2017, we saw Non-Commercials reaching record net short positions in almost all important agri commodities – and ICE Arabica was no exception. As of 27 February, Managed Money was still holding an almost record net short position on ICE Arabica.
Where to go from here
- Outlook 2018: Good Buy, Low Prices
- Agri Commodity Markets Monthly October 2018: A Hard Comeback for the Softs
- Agri Commodity Markets Sector Team
- Home
