Experts are counting coffee trees in Brazil as prices have reached 10-year highs. Written by Reuters

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© Reuters. PHOTOGRAPHY: Robusta coffee fruits can be seen in Sao Gabriel da Palha, Espirito Santo, Brazil, May 2, 2018. REUTERS / Jose Roberto Gomes / File Photo

Authors Marcelo Teixeira and Roberto Samora

NEW YORK / SAO PAULO (Reuters) – Coffee experts working for commodity houses take narrow, winding roads in the Brazilian state of Minas Gerais as they tour the coffee belt checking the 2022 crop prospects just as prices approach their highest levels in the last 10 years.

This has been a difficult year for coffee growing in Brazil, the world’s largest producer. Prices rose after the drought, and subsequent frosts destroyed as much as 20% of coffee trees, hitting future production. So far, those studying crops have given broad estimates for the 2022 harvest, although traders are still betting on less fertile crops for now.

People walking in the fields will learn the truth about it from now until the end of January, the optimal time to evaluate crops.

“The rains that followed the frosts and drought have brought beautiful blooms, but now we need to see how many of them will grow into cherries,” said Ryan Delany, chief analyst at U.S. Coffee Trading Academy LLC.

Arabica coffee futures on ICE (NYSE 🙂 this year received more than 90% after drought, frost, and then the global shortage of containers that hampered shipping. Rising prices have forced farmers in Brazil, Colombia and elsewhere not to deliver pre-sold coffee.

During the tour, experts try to count the cherries in the branches to come up with more detailed projections. Estimates published so far vary widely.

Soft commodities analyst Judy Ganes, who was recently in Brazil with fellow analyst Shawn Hackett, estimated Arabica production in Brazil at about 36 million bags, one of the smallest projections on the market.

Ganes says that the vegetative health of trees is disturbed by drought and frost, which others have not fully explained. She expects Brazil’s total yield (including the Robusta variety) to be 55 million bags, far from the 2020 record, the previous “annual” yield in the two-year production cycle, which reached about 70 million bags.

Jonas Ferraresso, a Brazilian coffee agronomist, says flowering was widespread after the October rains, but the conversion to fruit was below normal.

“Many trees have developed new leaves on the branches instead of berries, which is an unusual development probably associated with a severe drought earlier in the year,” he said.

Others are more positive.

Rabobank, which specializes in financing agriculture, expects a yield of 66.5 million bags, which is not far from the record, adding that such production would generate a global surplus of 3 million bags and lower prices below $ 2 per pound in 2022. American retailer Cardiff Coffee production is 63.1 million bags.

Paulo Armelin runs a 220-hectare farm in the Patrocinio area, Minas Gerais, where the frosts were strongest. He said about 20 percent of his fields were hit by a sudden cold snap and would not give birth next year, but the rest was not affected.

“At least on my farm, the flowering was good and the conversion to cherries looks good,” he said.

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