USDA Cuts Projection For Brazil's 2022/23 Coffee Production

By Steve Wynne-Jones
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USDA Cuts Projection For Brazil's 2022/23 Coffee Production

Brazilian farmers are expected to harvest 62.6 million 60-kg bags of coffee in the 2022/23 crop (July-June), an amount that is 1.7 million bags smaller than a June projection, the United States Department of Agriculture (USDA) has said.

In its second estimate for Brazilian production, the U.S. government agency said coffee trees in the world's largest producer and exporter suffered more than initially estimated with unfavourable climate conditions, leading to smaller yields.

Arabica Coffee Reduction

The USDA said all the reduction in its projection came from a 1.7 million-bag cut in the production of arabica coffee, the milder variety favoured by coffee chains such as Starbucks and Panera.

The department now expects Brazil to produce 39.8 million bags of arabica, down from 41.5 million bags seen in June.

The U.S. is the world's largest consumer of coffee, while Brazil is its largest supplier.


Weather Impact

Brazil's coffee production has been negatively impacted by erratic weather for the last two crops, including last year's strongest frosts in 40 years and the harshest drought in decades.

The USDA kept its projection for Brazil's robusta coffee production, the type largely used to make instant coffee, unchanged at 22.8 million bags.

Arabica coffee futures on ICE rose on Tuesday as the market extended its rebound from last week's 16-month low.

Dealers said the fund selling that had helped to fuel the recent decline in prices appeared to have dried up, at least temporarily, while reports that Brazil's crop next year may be smaller than previously expected also contributed to the rise in prices this week.

News by Reuters, edited by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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