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3111 views December 3, 2022 posted by Maja Wallengren

EXCLUSIVE: Brazil’s 2023 Coffee Harvest To Recover To 50M-56M But Conilon Down 30%

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Coffee production in the next 2023 harvest in Brazil is forecast to reach between 50 million and 56 million 60-kilogram bags, which will mark a modest recovery IF no further negative weather impact further harms the 2023 crop development, but overall state of 2023 harvest is still extremely fragile as the conilon crop in Espirito Santo is down 30% on output in the 2022 harvest.

Brazil’s 2023 coffee harvest to see only small recovery IF weather next 6 months is favourable, but conilon crop down 30% on year

Dec. 1, 2022 (SpillingTheBeans)– It has been another Annus Horribilis for the 3rd consecutive crop cycle for Brazil’s coffee growers across the vast majority of both Arabica and Robusta-Conilon growing regions.

Releasing her 1st official forecast for the next 2023 coffee harvest in Brazil’s new 2023-24 crop cycle, SpillingTheBeans’ Maja Wallengren, an Independent Coffee Analyst who has covered coffee for close to 30 years across the world, puts early expectations for production in the 2023 harvest to reach between 50 million and 56 million 60-kg bags. The big range used for the new 2023 crop reflects the high level of uncertainty for the final outcome caused by the growing ‘Accumulated Stress Impact’ – a phrase coined by Maja Wallengren in her ongoing Masters studies – that increasingly is affecting both arabica and conilon coffee regions caused by the emerging phenomenon of multiple adverse weather effects, all of extreme nature, impacting the traditional production patterns and coffee trees’ capacity to recover from such weather impact.

Travelling over 11,300 km including over 4,000km overland, Wallengren spent 21 days in the field visiting coffee regions accounting for 86% of Brazil’s Arabica production and 88% of the Robusta-Conilon area, including Southern Minas, Alta Mogiana, Cerrado Mineiro, Matas de Minas, northern Sao Paulo, Espirito Santo and Rondonia.

“The 2023 harvest development in Brazil is once more showing a high negative impact of the ongoing weather problems that continues to effect coffee production across the vast majority of the Brazilian coffee growing regions, problems that has delayed both the recovery from the frost and drought damage which caused severe losses to production in the recently completed 2022 harvest, and which continues to cause new damage both to the 2023 and 2024 crop development. Brazil’s growers have had to deal with the non-stop weather problems from ongoing dryness and drought, hailstorms, intense cold weather, new frost damage in June-July of this year, hurricane-force winds, flooding and extreme heavy rains, and mass defoliation which left trees unusually weakened and without the sufficient nutrition to sustain cherry development from the 2023 flowering. Furthermore, the continuing presence of La Niña weather effects, which is particularly strongly felt in the Southern Hemisphere, is also reducing sun-exposure significantly, an issue that has been scientifically proven to lead to significantly reduced yields in coffee production.” said Maja Wallengren, Owner and Chief Analyst of SpillingTheBeans.

“Total coffee production in Brazil in the next 2023 harvest is unlikely to reach more than a maximum of 56 million 60-kilogram bags and could be as little as 50 million bags if unstable and unfavourable weather continues to hit coffee regions at any time and of any nature during the next 6 months. Considering how the current and ongoing negative weather trend is affecting Brazil coffee regions, it would appear to be too optimistic to hope for the near perfect ideal weather conditions in the full 6 month-period from now until the beginning of the physical harvest in late April/early May, weather that is required in order to meet the prospect of a harvest producing 56 million bags would appear highly unlikely. But for the sake of Brazil’s 300,000 coffee families who depend on coffee production for their livelihood, I certainly and sincerely do hope they will get improved weather as the 2023 harvest development moves along. Particularly crucial will be good rains coupled with adequate sun exposure from mid-January to mid-March when the altogether important bean formation period takes place,” said Wallengren.

On the Arabica prospects;
*The 2023 arabica harvest is expected to post a modest 10-20% recovery from the 2022 harvest, particularly in the regions of Alta Mogiana, Cerrado Mineiro and Sao Paulo, where coffee farms overall are reporting better yields and less negative impact from weather than experienced in the 2022 cycle. Southern Minas, however, could see most of, or all, of its recovery process eradicated by the particularly severe hailstorms that hit all key producing regions across a 300km line going straight through Southern Minas in early November in a highly centralized manner and caused severe damage of 30-60% to coffee farms in a region not below 30-50,000 hectares of cultivated area. This followed damage from isolated hailstorms that have taken place through the last two months and affecting multiple regions in an isolated manner, but with the final impact confirmed to have been represented in a concentrated manner, albight spread out over more than two months.
Arabica production in Matas de Minas is experiencing less of a biennial impact and seeing overall harvest development largely flat on the year, while Arabica production in Bahia and the southern part of Espirito Santo is entering the down-cycle for biennial production and as such is expected to come in slightly below final 2022 crop numbers.

*Overall, however, while it is positive to observe that a small recovery to the Arabica crop is expected in the 2023 harvest there is simply not enough neither sufficient recovery from existing arabica regions, nor from newly replanted or renovated regions coming into production in the 2023-24 cycle to allow for more than a modest recovery. Furthermore, of the 200,000 hectares of the cultivated arabica coffee that was damaged by the 2021 frosts, it has to be considered that between 30-40% of that land has been uprooted and farmers have switched to growing grains crops on this land instead. It is not expected neither by local coffee growers nor Brazilian industry officials that this land will return to coffee production again. Finally, it has to be considered a high possibility that the Accumulated Stress Impact that arabica coffee farms across Minas Gerais and Sao Paulo suffered in 2022 will be repeated to some degree in the 2023 harvest, but the scale of impact from this will not be known until after bean formation and bean size growth is completed by the end of March.

On the Conilon-Robusta prospects;
*The 2023 conilon-robusta harvest will cause a major negative surprise to the world coffee market as it is beyond doubt an extremely poor crop in development which at this point has been entirely ignored by the futures trade. The negative impact of multiple weather disturbances from late May through November is of such magnitude that it’s comparative to the big drought in 2014-2015 which saw production in ES cut short by a third. The extreme rate of defoliation caused to conilon trees across the entire central-northern part of Espirito Santo, which is home to over 70% of Brazil’s robusta-conilon crop, coupled with trees recovering from both a late but also record harvest in 2022 which left the conilon coffee park more weakened than usual, is resulting in the conilon production falling by a minimum 30% in Espirito Santo. Depending on further weather development in the next 3-4 months crucial to conilon this drop could grow even bigger. Driving hundreds of kilometres through all the main conilon-growing municipalities in central-northern Espirito Santo the farms with good or even decent yields were scarce, representing at the most 1-2 out of 10, while a full 8-9 farms were in terribly poor state. There is no sugar-coating the immense negative impact that the last 6 months weather has caused to the conilon prospects, because even if some new areas of production is been added to the conilon park in Espirito Santo, such areas are limited for the 2023 harvest and the drop in prices in the last month have further discouraged Brazilian conilon growers to consider investing anything in the farms for the crop ahead. Overall, the limited new areas of cultivated area entering production in 2023 are far from sufficient to compensate for the significant losses to the ES conilon crop in 2023.

*In Rondonia, the most encouraging story is without a doubt the small but steadily growing production of robusta coffee both in volumes and in quality. The quality issue is of particular importance to the global coffee market as the high quality robustas now starting to emerge from Rondonia, together with improving quality conilon beans from Espirito Santo, are sufficient to offset any increase in robusta coffee to blends sold by roasters in retail markets worldwide
caused both by higher prices for arabica coffee as raw material, as well as caused by rising consumer prices because of high inflation.

Despite increasing productivity in Rondonia, however, there is no evidence of any significant increase in the overall harvest volume here, and the Conab figure for Rondonia to have produced 2.3M-2.8M bags in 2021 and 2022 are at the centre of a controversial dispute between Brazil’s Agriculture Ministry and the State Authorities of Rondonia, who produced copies of official records of the fiscal notes from Rondonia, which at just over 1.45 million bags Jan-Oct and projected to reach a maximum of 1.6 million bags for 2022 are very far off from what Conab has reported. Is the pressure on Conab to issue higher figures for political reasons and/or commercial interests so high that this has influenced the Conab reporting on Rondonia, one has to wonder?

*Conilon production in southern Bahia, meanwhile, is seen entering a lower biennial cycle this year.
*Overall, Brazil’s conilon-robusta harvest in the next 2023 crop will see a sharp decline in overall volume owing to the fact that there simply is not even remotely sufficient new areas or areas un-affected by negative climate impact to offset the very significant drop in production in Espirito Santo. Furthermore, like in the case of arabica production, it is highly likely that the conilon crop in ES will suffer some degree of Accumulated Stress Impact from the last 6 months of extreme weather.
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Author’s Note; For comparison, my initial figure for the 2022 harvest was for the harvest to produce 44M-48M bags, and I have for now settled for the 2022 harvest to have produced 48M bags, 18M for Conilon-Robusta and 30M for Arabica. I continue to review the robusta figure for Rondonia based on the latest evidence, as well as the final arabica figure for Matas, but do maintain and insist that the Arabica crop in the 2022 harvest ended BELOW the volume produced in 2021, primarily because of Southern Minas reporting overall lower output in 2022 compared to 2021.

Background on Maja Wallengren;
*Has traveled extensively to Brazil since over 22 years and know all the main coffee producing regions first hand, both Arabica, Robusta and Conilon.
*Has in the last 15 months made 3 trips to Brazil, spending nearly 2 months total visiting all main Brazilian coffee regions.
*During the November crop trip just completed Wallengren spent 21 days IN the field, and visited regions accounting for 85% of total arabica output and 88% of total robusta-conilon production.
*An Independent Coffee Analyst releasing own numbers and forecasts for Brazil and the world supply-demand balance since over 10 years as Maja Wallengren/SpillingTheBeans, Wallengren has covered and specialized in coffee for close to 30 years worldwide with first hand research, analysis and reporting conducted in over 60 producing countries worldwide.
*Adding academic credentials to her CV and already working on the thesis, Maja Wallengren is currently 2/3 way through the MSc program in Agricultural Economics at SOAS University of London.
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