Brazil could see one of the steepest ever plunges in coffee production in 2021 following last year’s record crop. Drought brought on by La Niña hit the new crop during its critical flowering period and threatens to drive down yields.
Top global coffee producer Brazil is currently in the off year of its biennial cycle. Even so, some farmers and exporters in São Paulo state, a key coffee region, are currently expecting production to drop by as much as 20% to 30% from normal levels. That’s in addition to the usual, off-year declines of 11%, based on Gro’s analysis of the past seven biennial production cycles. Brazil produced 68 million bags (60 kg/bag) of green coffee in 2020, a record amount.
Rising Arabica coffee prices underscore the uncertainty facing the Brazilian crop. The ICO composite indicator climbed 9% in February to finish the month at 128.34 US cents/lb. And the ICE May coffee futures contract is up nearly 15% over the past year.
Flowering for Brazil’s coffee crop typically occurs between November and February, a period in the latest year when the main coffee producing regions of Minas Gerais, Espirito Santo, São Paulo, and Parana all experienced drought. Gro’s Drought Index reading for São Paulo in the fourth quarter of 2020 was the highest in 11 years. And the Parana region saw its driest September on record, Gro’s Rainfall Monitor shows.
The 2021 crop will begin harvest in May, and fears of a weak harvest need to still be confirmed. Use Gro to follow the changing weather patterns in Brazil’s coffee growing regions.
This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.