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fundamental news about coffee

Hi, let's see what will happen next 9 months - i'm curious, could be a hard time for longer term inverstors again!

# La nina is coming back?
# the climatic change
# money printing
# undervalued commodity?
# best coffee crop ever 2020/21 is sold out now
# inventories declining?
# pandemic
# consumption in the coming months
# supersolarcycle
# frost and drought?
# I try to get more info from Vietnam Ethiopia and Colombia

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Exclusive On-the-ground Report: Brazil Frost Damage Worsens; Global Coffee Supply Challenges Loom Until 2025

By Maja Wallengren, origins contributing editor, STiR coffee and tea

The global coffee trade enters an unexpected wave of turmoil as the coldest weather in years hit Brazil, the world’s largest coffee producing and exporting country, leading to the most severe damage seen in the country’s growing regions in over 40 years, growers and traders told STiR coffee and tea in early August. The damage is so severe that even though current overall figures point to 10-15% damage of the South American giant’s arabica coffee area. The timeline for either pruning – or, as in many cases entire replanting of fields – will be impossible to catch up with until the 2025 production cycle, agricultural experts said.

Arabica futures at 7-year high

Losses from the frost damage continue to grow as more detailed reports emerge from agronomists and agricultural researchers conducting field research across Brazil. This comes at a particularly sensitive time for the world coffee market as supply is running low against an already small harvest in Brazil and consumer demand is booming against low inventories and stocks, according to figures and data from the International Coffee Organization (ICO) and the U.S. Department of Agriculture (USDA).

The unexpected severity of the frost in Brazil sent arabica futures at the ICE exchange in New York soaring to 7-year highs over $2.20 per pound in late July before profit taking took over. But prices remain trading in the 1.80-1.90 range and is expected to roar back to over 2.00/lb. in the short to medium term, and possibly even reaching 3.00/lb. for the first time since 2010, commodity analyst Judith Ganes told local press in Brazil including Reuters and Bloomberg in late July.

By the end of July estimates and projections from both private and official sources in Brazil said that while frost damage would reduce totals 2-4 million 60-kilogram bags, more significant damage of between 8-10 million 60-kilogram bags of coffee could be lost because of frost damage in the next 2022 harvest.

And this comes on top of the already small off-cycle crop being harvested in 2021. Days before the fourth cold front in a month hit Brazil by July 29th, Brazil’s official crop supply agency Conab said as much as 200,000 hectares – or approximately 11% of this year’s total cultivated area – was negatively hit by the frost. The Minasul Cooperative based in Varginha in southern Minas told local Brazil media that as much as 30% of Brazil’s entire arabica growing areas were likely affected by the freezing temperatures for extended periods of time once all the damage reporting is completed.

At least 3-4 years of uncertainty in fresh coffee supply

The damage from the frost is unprecedented. For multiple reasons, the numbers of losses as well as overall impact on the Brazilian production cycle will have much more long-term effect than what the initial figures reveal, said agronomists and market analysts. There is agreement by sources that the market should be prepared for at least 3-4 years of critical supply problems as it will be until 2024-2025 before Brazil’s coffee regions will recover from the extent of the frost damage.

“In the best-case scenario we are three years away from seeing a full recovery to Brazil’s production cycle," said Jonas Ferraresso, an argonomist who himself has a small coffee farm of three hectares in the sate of São Paulo. "But more likely it will not be possible to see all the areas affected re-planted until the harvest in 2025 as it is already too late for most farms to contemplate replanting in the next year.”

Many farms will have to re-plant and will do so gradually over 2-3 years

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Seeds for new coffee seedlings are planted by May-June at the latest for the plants to be ready to be transferred to the fields in the February-March planting season, Ferraresso told STiR in excusive comments. He adds that not only is it “too risky” to conduct replanting after March as Brazil enters the dry season with limited rainfall, but also that many “coffee plant nurseries were damaged as well and there just is not enough plant material for all the areas requiring replanting” to be able to do so during 2022 – even if farmers have access to financing. For those able to prune damaged fields, some production will bounce back by the 2023 harvest season, but most of the farms that will have to replant will do so gradually between 2022-2024, and that part of Brazil’s coffee production will not recover in full until the 2025 harvest cycle, he said.

The current situation causes devastation for Brazilian farmers, who pinned their hopes on a big recovery next year from the current small-cycle crop. This crop is not only recovering from massive stress to trees after last year’s record harvest of between 68-69 million bags, but saw yields cut further short by the biggest drought in 90 years which reduced the 2021 harvest to one of the smallest in 10 years, pegged to reach 49-55 million bags. But this was before the frost hit between the end of June and end of July, and more cold weather with potential for freezing temperatures are forecast through the first week of August.

Roasters may be forced to buy coffee on a day-by-day basis

Speaking to STiR in exclusive comments traders, growers, agronomists, and exporters said the magnitude of damage will leave the market in a precarious situation, as roasters and buyers will push stocks to its limit in order to cover positions ahead of the next harvest, and if even the slightest additional damage — such as further frosts in Brazil, issues with the new flowering season that start in October, or any other weather problems in producing areas elsewhere in the world — can potentially push the deficit into a situation where roasters will have to buy on a day-by-day basis based on fresh supply reaching the market.

The massive cold wave that brought damaging frost to Brazilian coffee fields since the end of June provoked heavy snow across at least 14 different cities in southern Brazil in late July, and severe damage was reported across the state of Minas Gerais - which alone accounts for between 50-60% of Brazil’s entire coffee harvest in an average cycle - as well as the states of São Paulo and Parana.

Less percentage damage than 1994-1995, but global consumption today is doubled

“This is the worst frost to hit Brazil’s coffee industry since 1978," said Fernando Barbosa, himself a grower in the key southern Minas coffee region and a long-time insdustry advocate who works with multiple grower groups across Brazil. "We are very sad by these events and the producers are devastated, many growers are in shock to see all their work been reduced to nothing overnight.”

While the overall scope of frost damage in percentage of the crop may still turn out to be less than the 1994-1995 frosts, which were the last time a major frost season in Brazil causing the global coffee market to go into an extended frenzy of panic buying, the overall impact for the 2021-2022 crop years is more significant as global demand today is over double what it was then, market analysts said.

source: stir-tea-coffee.com/tea-coffee-news/brazil-frost-damage-worsens-global-coffee-supply-challenges-/

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August 2021 ENSO update: Rockin’ out of neutral?

ENSO-neutral conditions continue in the tropics, but ENSO’s next performance may be approaching, as forecasters have increased the likelihood (~70% probability) that La Niña will reemerge by early winter. A La Niña Watch remains in effect.

source: climate.gov/news-features/blogs/enso/august-2021-enso-update-rockin’-out-neutral

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Southern Minas region loses 19% of 2022 coffee crop potential - Comexim - Reuters News
Sentiment:
Mostly negative
11-Aug-2021 11:42:55
by Marcelo Teixeira

NEW YORK, Aug 11 (Reuters) - Southern Minas do Brasil lost 19% of its coffee crop potential for the next crop after a wave of frosts in June and July hit the most important producing area of the world's largest exporter , said the coffee trader Comexim on Wednesday.

"The frost has hit hard and considerable damage has been done," the trader said, as the global coffee market continues to assess the situation in Brazil amid contrasting opinions about how bad the 2022 crop will be.
Comexim's projection is an update of a previous view of the trader and exporter that estimated the potential damage to the crop at 12.5% for the South of Minas.

It also sees potential losses of 13% for the harvest in São Paulo, Brazil's second largest producer of Arabica coffee, 13% for the Cerrado area, another important producing region in Minas Gerais, and 11% for Paraná, a producer smaller.

Brazil's 2022 crop would be a "year" in the biennial Arabica production cycle, which alternates years of higher and lower production. The current crop has been a tough "year off", as the worst drought in the country in 90 years has made production even lower than normal.

Comexim believes that the reference prices for Arabica coffee in New York KCc1 have not yet adequately reflected the damage caused in Brazil.

"The calm winds of the market, which traded in the relatively narrow range between 171-182 cents/lb last week, makes us wonder what is happening, as frost damage has pointed to a bull market that has not yet become reality. ", said Comexim.

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Vietnam Coffee Monthly Round-Up July 2021 Weather

Dry weather reported over coffee regions in June and July, rather strange as we should be into the rainy season. The below average rainfall in June and July may result in a decrease in Vietnam coffee production of the next 2021/21 crop.

Fertilizer price is still high for now, almost double compared to the same period last year so it’s hard for farmer to apply the fertilizer. In addition, the dry weather in the begin of rain season will delay fertilizer application (farmers are waiting for the rains to apply 2nd fertilizer).

source: simexcodl.com.vn/en/vietnam-coffee-monthly-round-up-july-2021/

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Brazil farmers remove dead coffee trees, some switching to grains

By Roberto Samora and Marcelo Teixeira

SAO PAULO/NEW YORK, Aug 24 (Reuters) - Brazilian farmers who had coffee fields severely damaged a month ago by the worst frosts in 27 years have started taking out dead trees to make room for new plantings, with some of them planning to switch part of the affected land over to grains.

Farmers in Brazil's Minas Gerais state, the top coffee area in the country, are pruning the trees impacted by the frosts and in some cases taking the trees out altogether, using tractors, when they see that the plant has died.

Clearing coffee trees for soy and corn could allow Brazilian farmers to profit from high grains prices early next year when the row crops are harvested but fewer coffee trees in the world's top producer could lead to years of higher coffee prices for consumers. The worst cold front to hit Brazil's coffee producing area since 1994 is estimated by the government to have hit 11% of the planted area, potentially hurting production prospects for the next two seasons and likely driving the global coffee market to a supply deficit. "Many farmers are already taking trees out. We can see from the road they are piling up the dead trees," said Airton Gonçalves, a coffee farmer in Patrocinio whose crops were damaged but has yet to take any action since he is still talking with his insurance company about compensation.
Most farmers, he said, do not have insurance on their crops so they have already started dealing with the damaged trees. "There will be some areas migrating to grains. A friend of mine that has 350 hectares (865 acres) decided to lease part of the land for soybean planting," said Gonçalves. A rotation with soy in summer and corn in winter is one of the most profitable systems in Brazil, taking area from other crops such as sugarcane in the past. It will likely expand in Minas Gerais on traditional coffee areas. Jose Braz Matiello, an agronomist with the Procafe foundation in Minas Gerais, said farmers tend to plant grains in low-lying areas, to avoid running the risk of having coffee hit by frosts again in the future.

Coffee is a perennial crop that stays in the field for years, unlike soybeans, which are planted in the spring and harvested in the summer.

Adriano Rabelo de Rezende, technical head at the Minasul coffee co-op, who flew over damaged coffee fields with Reuters after the frosts, said the recommendation is for farmers to wait for the rains before taking any action.
"With the rains some plants could recover, so it will be better to decide the best action: what type of pruning," he said. Rains are expected in Minas Gerais by the end of the month. They will be key not only for the trees' ability to recover, but also for the flowering stage that will determine production potential for the next crop.

Mario Alvarenga, who has two coffee farms in Minas Gerais, said the drought remains challenging. "You don't find any moisture in the soil up to 1 meter (40 inches) deep. Crops that were not hit by frosts are withering," he said. Alvarenga estimates that 18% of his coffee crops were damaged by frosts. He has already started pruning where he thinks trees have a chance of recovering when the first rains arrive, leaving the ones that are dead to be taken out later.

nasdaq.com/articles/brazil-farmers-remove-dead-coffee-trees-some-switching-to-grains-2021-08-24

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Crop failure and exports are expected to raise the price of coffee by up to 40%

The price of coffee that reaches the consumer's table is expected to increase between 35% and 40% by the end of September. The estimate is from the Brazilian Coffee Industry Association (Abic), which points out a series of factors to explain the imminent rise in prices, such as the drop in productivity due to adverse weather conditions and greater demand from the foreign market. “This year, there is a sum of factors that has not been seen since the beginning of the 1990s. The dollar is extremely high, which, at the same time as it raises production costs, increases foreign demand. In addition, after harvesting an excellent harvest in 2020, production, which this year would already be lower, was hampered by the lack of rain and successive frosts”, said Celírio Inácio, executive director of Abic, to Agência Brasil, pointing out the conditions. climate as the main factor for reducing production.

Crop Forecast
According to the National Supply Company (Conab), the current harvest should not exceed 48.8 million 60 kg bags of grain. If reached, this mark will represent a result 22.6% lower than the previous season. A situation that, as the technicians of the public company warn, could worsen if the drought in producing regions lasts longer.
According to Inácio, producers already expected to harvest a smaller volume of grain than last year. This is because one of the characteristics of coffee cultivation is its bienniality, that is, the fact of interspersing a year of high productivity with another of lesser volume. However, the intensity of drought and/or frosts that hit the country's main growing regions forced the sector to further reduce its initial expectations.

States
The most affected states are Minas Gerais, São Paulo and Paraná. In some locations, mainly in southern Minas Gerais, crops were completely destroyed by frost.

Losses
The exact scale of the consequences for the coffee sector of the drought and severe frosts recorded this year is still being evaluated. However, in a statement, the Ministry of Agriculture, Livestock and Supply (Mapa) informed that preliminary surveys indicate that the frosts alone reached about 200 thousand hectares of coffee plantations (each hectare corresponds, approximately, to an official football field). In addition to direct damage, adverse weather conditions create uncertainties regarding the performance of the next crop. What also contributed to the rise in commodity prices. According to the Center for Advanced Studies in Applied Economics (Cepea-USP), this Tuesday (17), a bag of type 6 Arabica coffee (delivered in the city of São Paulo) was being sold at R$ 1,032.50. A year ago, the same bag was sold for R$ 566.51. "With all this, the industry is pressured to pass the price on to retail," added Inácio, noting that, between December 2020 and July 2021, the costs of raw material used in planting increased, on average, by 82%. The price of coffee, according to him, rose, on the shelves, in the same period, about 16%, less than other food products considered basic, such as rice and soy oil. “But this 35% to 40% increase that we are estimating is considering the current moment. If we don't have rain within the next two months, when flowering occurs, this tends to be even greater.” In the sector monitoring bulletin released last week, Conab points out that, "in the next few months of 2021, the return of rainfall in satisfactory volumes becomes essential to alleviate the damage already caused by drought and frost and to sustain the flowering of the crop to be harvested in 2022”, points out Conab.

source: agenciabrasil.ebc.com.br/economia/noticia/2021-08/quebra-da-safra-e-exportacoes-devem-elevar-o-preco-do-cafe-em-ate-40

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Drought-struck Brazil expects Sept rainfall well below average

SAO PAULO, Aug 27 (Reuters) - Rainfall in key energy-producing regions of drought-struck Brazil is likely to remain well below average in September, the national grid operator ONS said on Friday, doing little to relieve high energy prices and headaches for agribusiness. Brazil, one of the world's agricultural superpowers, is grappling with one of its worst droughts in nearly a century. The lack of rainfall has hurt farmers and forced the country to rely more on costly thermoelectric power plants, stoking inflation and dragging on the economy. With reservoirs low at key hydroelectric dams, the government is encouraging Brazilians to consume less power, but has so far ruled out energy rationing. On Friday, the ONS said it expected energy usage to rise 0.9% next month compared to the same period last year. But it said rainfall in areas where hydroelectric power is produced will remain below average in September. In the southeast and midwest Brazil, where the country's main hydropower reservoirs are located, rainfall should reach just 57% of the historical average for the period, it said.

nasdaq.com/articles/drought-struck-brazil-expects-sept-rainfall-well-below-average-2021-08-27

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La nina is performing - Nino region 3.4 is now -0,9 => below -0,5
THIS is a game changing moment!

cpc.ncep.noaa.gov/products/analysis_monitoring/lanina/enso_evolution-status-fcsts-web.pdf

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Coffee Market Report
10 Sep 2021

The analysts Safras & Mercado have reported that Brazil coffee farmers have already sold around 60% of the estimated total production of 56.50 million bags from this current Brazil Coffee crop. The pace of sales at this time across a 5-year average is reported to be around 48%, thus illustrating that current crop sales are picking up pace over and above that of the recorded five-year average. This selling activity has been assisted to a degree by higher value seen in the New York Coffee Terminal Market, as well as the fact that this coffee year is seen to be an off year in the biennially bearing crop rotation of the Brazil Coffee crop.

The weather conditions within Brazil meanwhile have been reported to have remained, for the most part, hot and dry throughout the main Arabica growing regions. Light sporadic showers are forecast for this weekend in the states of Parana, Sao Paulo and South of Minas. Adequate rains have fallen in the Conilon producing areas between the North of Espirito Santo and the South of Bahia this week.

The U.S. Governments National Weather Service’s Climate Prediction Centre is now on La Niña watch, there has been a transition from the earlier in the year El Niño Southern Oscillation (ENSO) neutral outlook, to forecast that there is now a 70-80% chance for a La Niña phenomenon to develop during the last quarter of this year. The La Niña weather phenomenon historically brings with it excessive rains for the Pacific Rim countries and in terms of coffee, having an impact upon the climatic conditions within Colombia, Indonesia and Peru, while it can also influence dry conditions for the arabica coffee districts in Southeast Brazil. Should this La Niña phenomenon continue to develop and come into play, with which the relative strength can only be determined during the course of the next few months., aside from concerns over excessive rain damage for the coffee crops in Colombia, Peru and Indonesia, it would bring forth concerns over the threat of drought damage for the next 2022 Brazil crop, which may as the time nears for the onset of spring and summer rains in Brazil, to set the flowering and next crop potential for 2022, become a factor that shall be closely watched by the market.

source: iandmsmith.com/news-headlines/coffee-market-reports/coffee-market-report-1295

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Colombia 2020-21 Coffee Harvest Ends Down On La Niña Weather
by Maja Wallengren - October 4, 2021

Coffee production in the now completed 2020-21 harvest cycle in Colombia, the world’s third largest coffee growing nation and largest producer of mild washed arabica beans, and it ended lower with total output expected at about 13 million 60-kilogram bags. This comes after weather problems cut yields shorter than expected, exporters and industry officials in Colombia said.

This compares to total production in the previous 2019-20 cycle where Colombian coffee producers registered 14.1 million bags. The coffee year in Colombia follows the international cycle which runs from Oct. 1 – Sept. 30. The harvest was initially pegged to come in slightly below the level seen a year ago and similar to the harvest of 13.866 million bags in the 2018-19 cycle. Even after the weather phenomenon known as La Niña started causing havoc for growers between June and July the Colombian Coffee Growers Federation, also known as Fedecafe, said production could still reach 13.5 million bags.

“The final production figures are very disappointing but after the many weather problems reported in the last few months when La Niña hit the southern regions in particular, it’s not that much of a surprise at this point,” a trader with an exporter in Bogota told STiR coffee and tea. Adding that the smaller Colombian harvest will raise by at least 1.0 million bags the shortfall to a growing global deficit, he said the outlook for the new 2021-22 harvest cycle in Colombia, which officially started on Oct. 1, also will be cut short by the irregular weather caused by the growing negative impact of climate change across the Colombian coffee areas.

Roberto Velez, chief operating officer of Fedecafe, said last August the official forecast was cut for the 2020-21 harvest to 13-13.5 million bags as a direct impact of the return of La Niña to Colombia. La Niña caused an excess of heavy rains and overcast weather reducing final yields significantly in the “mitaca” crop from the southern growing regions which only has harvest in the second of two annual crops in Colombia, Velez told Bloomberg news in a report published Aug. 19.

Colombia is one of less than a handful of coffee producing countries in the world that has two crops during the year. The main harvest that starts on Oct. 1 and for which picking continues until the end of January or early February, and the mid-crop – known as the mitaca – for which harvesting starts between the end of March or early April and runs through August. In the last 10-15 years rising output from the top southern province of Huila caused annual production to even out with the mitaca share growing to about 45% now from 30-35% 20 years ago, and the main harvest making up 55% of the total volume today.
....
source: stir-tea-coffee.com/tea-coffee-news/breaking-colombia-2020-21-coffee-harvest-ends-down-on-la-niñ/

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There is so many information at the moment that it's hard to write it all - here the most importants:

colombia 1 million less output down to 13,1 mBags
indonesia 1.6 to 1.8 million bags less output down to 10.6 million
brazil ~10 to 15 mBags less output
this in my opinion are the marketdriving fundamentals

we had dry weather in september and early oct in brazil now a lot of rain
La nina has developed - vietnam colombia and indonesia will get some problems
maybe brazil later on - and we are still in solarminimum this can cause new frostproblems next year - which of course nobody has on their radar yet

total inventories are around 19-22mBags declining ~1.5 million each month with a climbing worldconsumation of about ~2.5 million Bags 2021-2022
see nestle: Nestle posted a forecast-beating third quarter on Wednesday, saying strong coffee sales helped boost overall revenue. The world's largest food group said its Starbucks-branded products posted 15.5% growth in the first nine months.

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Nino 3.4 region is now -1.1° ...there is nothing to say more

cpc.ncep.noaa.gov/products/analysis_monitoring/lanina/enso_evolution-status-fcsts-web.pdf

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Colombia Cuts 2020-21 Coffee Crop After Excess Rain: Federation

By Marvin G. Perez

(Bloomberg) -- Production cut to between 13m-13.5m bags from from prior estimate near 14m bags, Roberto Velez, CEO of Colombian Federation of Coffee Growers, says from Dubai.

La Nina-induced heavy rains and cloudy days curbed yields and has dimmed the outlook for the 2021-22 as well, he said
“For the moment we are not very optimistic for next year because it has rained tremendously,” he says

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NEW YORK/LONDON, Nov 4 (Reuters) - Commodities traders including Louis Dreyfus, Olam and Volcafe are pursuing legal action against hundreds of Brazilian coffee farmers whose failure to deliver on pre-agreed sales has left the merchants exposed to losses, according to sources and documents seen by Reuters.
Arabica coffee prices have rallied some 60% this year due to climate turmoil in Brazil. The price surge has tempted farmers to default on sales, tightening supply in a commodity that, like many others, has been affected by shipping delays and reduced availability of labor.
All three of the world's largest arabica producers - Brazil, Colombia, and Ethiopia - are experiencing increased rates of default, where farmers fail to deliver coffee at agreed-upon prices so they can attempt to re-sell at current higher prices.
Lawyers told Reuters this is the first time in decades that scores of coffee farmers are defaulting in Brazil, which grows about half the world's arabica beans. Defaults have spiked in other commodities like soybeans, where merchants have resorted to using satellites and deployed lawyers to go after farmers who tried to resell already guaranteed crops, as prices in that market, too, spiked. read more
Many court proceedings in Brazil are not public.
Volcafe, the coffee trading arm of ED&F Man, one of the world's largest commodity trading firms, has had problems with about 5% of its contracts in Brazil, according to the company's North and South America director, Nicolas Rueda.
"We managed to negotiate and find a solution in most cases. Only in cases when talks ceased we resorted to the courts," he said, without identifying the number of cases the firm was working on.
Olam confirmed cases of non-compliance and legal action but said they are not widespread. Louis Dreyfus did not return a request for comment.
Farmers are also defaulting in Colombia and Ethiopia, the world's second and third largest arabica producers. With Brazil, the three countries account for more than two-thirds of global arabica output. read more
"The incentive to default has never been higher (and) these guys are not just defaulting on one (season's) crop. You're looking at the tip of an iceberg here. It will get worse over next 12 months or longer," said a Europe-based trader at one of the world's largest coffee traders, who was not authorized to speak on the record.
Forward sales volumes in Brazil have plunged due to both defaults and severe shipping backlogs, said two other global traders, exacerbating already tight global coffee supplies.
The high rate of defaults could push futures, already near seven-year peaks, up further as the market depends on forward selling from Brazil to temper price rises, said a second Europe-based trader at a global merchant.
"There should be a continuous flow of (sales) from Brazil but everything's shut down. Its scary how quiet it is. We can't buy coffee. Our middleman can't get his coffee," he said.
"Put together with (shipping) issues, the defaults mean the availability of coffee in the U.S., Europe and Japan is getting more and more tenuous," he said.
Evidence of the tightness can already be seen in ICE exchange stocks , which have fallen some 11% over the past month alone. The stocks are a cheap and reliable supply source relative to the physical market.
Law firm Santos Neto Advogados is working on about 30 lawsuits related to coffee defaults, said Fernando Bilotti Ferreira, a partner at the firm. He said he is acting on behalf of four trading houses but declined to name them.
The size of the defaults vary from 500 bags to as high as 4,500 bags. At current market prices, a contract for 4,500 bags would be worth around 5.8 million reais ($1.03 million).
Many traders involved in court cases have been accepting farmers' requests to postpone deliveries into 2022, said Cristiano Zauli, a lawyer working in Minas Gerais, Brazil's largest coffee producing state. He has been involved in around 100 court cases in coffee this year and acted as a mediator in hundreds more pre-trial talks, he said.

Zauli declined to identify his clients.

FINDING COFFEE

Buyers who filed court cases are seeking legal orders allowing them to get their coffee from farms with the help of law enforcement officers, according to court documents in the states of Sao Paulo and Minas Gerais.
In one case, trader Olam had to go to two different locations to find the 750 bags it had bought from a farmer in Alfenas, Minas Gerais.
In another, Louis Dreyfus was trying to find 1,000 bags it bought from a farmer in Patrocinio, another Minas Gerais municipality. The trader's lawyer told the judge that the farmer re-sold the coffee to a local merchant, where it was delivered, according to the legal filings.
Two local Brazilian coffee brokers told Reuters defaults have hit practically all market participants, including coffee co-op Cooxupe, the country's top exporter.
Cooxupe said it normally negotiates with farmers facing problems but added it cannot "treat associated farmers differently," meaning the rules apply to all.
($1 = 5.6146 reais)
Reporting by Marcelo Teixeira; Editing by Steve Orlofsky
Our Standards: The Thomson Reuters Trust Principles.

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Brazil's 2022 arabica coffee crop to fall 20% from 2020 - consultancy

SAO PAULO, Nov 10 (Reuters) - Brazil's arabica coffee crop next year will likely fall around 20% from 2020, the last year of high production in the biennial arabica cycle, to 40 million bags after a year of drought and frosts, consultancy Safras & Mercado said on Wednesday.
According to Safras, Brazil produced around 70 million 60kg bags of coffee in 2020, a record. From that, 50 million bags were of the milder arabica variety, with robusta production seen around 20 million bags. The consultancy projects 2021 production, an off-year in the arabica cycle, at 56.5 million bags.
Safras coffee analyst Gil Barabach said during a presentation that this is a preliminary estimate, since there is still a long way until harvest starts around May or June next year.
He said there is a lot of uncertainty regarding the new Brazilian crop, but that recent rains improved the production prospect. Brazil's Agriculture Ministry said that around 20% of arabica coffee fields were hit by frosts in July, which led some analysts to expect a large production loss.

(Reporting by Roberto Samora, Writing by Marcelo Teixeira, Editing by Louise Heavens)

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Arabica Coffee Soars on Tight Global Supplies
Barchart - 1 hour ago

Dec arabica coffee (KCZ21) this morning is up +4.90 (+2.23%), and Jan ICE Robusta coffee (RMF22) is up +8 (+0.35%).
Coffee prices this morning are moderately higher, with arabica surging to a 9-3/4 year nearest-futures high. The parabolic rally in coffee continues today as concern about tighter global coffee supplies is fueling fund-buying of coffee futures.

Arabica coffee is soaring as drought and frosts in Brazil devastated the country's coffee crops. On Sep 21, Conab cut its Brazil 2021 arabica coffee production estimate by -8% to a 12-year low of 30.7 mln bags from a May estimate of 33.4 mln bags, down -37% from 48.8 mln bags in 2020. Also, Archer Consulting said Brazil might have only 21 mln bags of coffee available for export in 2021/22, a -55% drop from a year earlier due to reduced output and inventories.

source: barchart.com/futures/quotes/KC*0/futures-prices

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Cooxupé, the world's largest coffee co-op and Brazil's number one exporter, cut its projection for 2021 coffee exports to 4.8 million bags from 6.5 million bags previously, saying shipping bottlenecks and a smaller crop are reducing export volumes.
By Roberto Samora

SAO PAULO, Dec 2 (Reuters) - Cooxupé, the world's largest coffee co-op and Brazil's number one exporter, cut its projection for 2021 coffee exports to 4.8 million bags from 6.5 million bags previously, saying shipping bottlenecks and a smaller crop are reducing export volumes.
Cooxupé's president Carlos Augusto Rodrigues de Melo said the company was about to use for the first time an alternative to containerized shipping, using 1,000 kg bags to put the coffee in dry bulk vessels.
"We will ship more than 100,000 bags that way. It is an option to dodge high container price and the lack of containers in the market," Melo told Reuters.

Coffee, as well as cocoa, cotton and refined sugar, are usually shipped using containers. But shortages of that type of equipment, along with reduced space in container vessels, are leading to alternatives such as the use of bulk ships.
Melo said the co-op would likely make other shipments using the so-called 'big bags.'
Shipping hurdles, however, were not the only reason for smaller exports. The Cooxupé head said it was receiving around 2 million fewer bags of coffee from associated farmers due to a smaller crop.

Plus there are defaults. Many coffee farmers, in Brazil and abroad, are not complying with contracts to deliver coffee after prices jumped more than 60% this year. Melo did not comment on that, but Cooxupé was one of the companies in Brazil suffering from farmer defaulting.

The co-op now projects to move 5.8 million bags of coffee in 2021, considering deals for both domestic and export markets, from a previous estimate of 7.2 million bags.
Looking ahead to the 2022 crop, Melo said the flowering and the conversion to fruit was not ideal. Trees have suffered during this year's drought, which has hurt their capacity to develop berries.

source: nasdaq.com/articles/brazils-coffee-co-op-cuts-exports-view-to-use-big-bags-in-shipments

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The latest weekly
SST departures are:
Niño 4 -0.7ºC
Niño 3.4 -0.9ºC
Niño 3 -1.2ºC
Niño 1+2 -1.1ºC

After an excellent October and a bad November, rains so far not good in December for Brazil arabica areas. Some rains expected this week and next in Minas Gerais state. Above temps in nino regions you can see why - similar to last year - maybe a little better, but with much more stressed trees

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Experts count coffee trees in Brazil as prices hit 10-year highs
By Marcelo Teixeira and Roberto Samora
NEW YORK/SAO PAULO, Dec 13 (Reuters) - Coffee experts working for commodity trading houses are taking to the narrow, winding roads in Brazil's Minas Gerais state as they tour the coffee belt checking 2022 crop prospects just as prices approach the highest levels in 10 years. This has been a difficult year for coffee farming in Brazil, the world's largest producer. Prices surged after a drought and later frosts ruined as much as 20% of coffee trees, hitting future production. So far, those studying crops have produced wide estimates for the 2022 harvest, though traders for now are still betting on a less fruitful crop. The people walking the fields will find the truth of that between now and the end of January, the optimal time for crop assessment.
"The rains that followed the frosts and drought produced a nice flowering, but now we have to see how many of those will grow into cherries," said Ryan Delany, chief analyst at U.S.-based Coffee Trading Academy LLC.
Arabica coffee futures on ICE gained more than 90% this year after the drought, frosts, and then a global container shortage that hampered shipping. The price surge led farmers in Brazil, Colombia and elsewhere to default on deliveries of pre-sold coffee.
During the tours, experts try to count pinhead cherries in the branches to come up with more detailed projections. So far, estimates released vary wildly.
Soft commodities analyst Judy Ganes, who was recently in Brazil with fellow analyst Shawn Hackett, estimated Brazil's arabica production at around 36 million bags, one of the smallest projections in the market.
Ganes says the vegetative health of the trees was damaged by drought and frosts, something others are not fully accounting for. She expects Brazil's total crop (including the robusta variety) to come in at 55 million bags, far from the record 2020 crop, the previous "on-year" crop in the biennial production cycle, that reached around 70 million bags.
Jonas Ferraresso, a Brazilian coffee agronomist, says the flowering was widespread after October rains, but the conversion to fruit was below normal.
"Many trees developed new leaves in the branches instead of berries, an unusual development probably linked to the harsh drought earlier in the year," he said.
Others are more positive.
Rabobank, which specializes in agricultural financing, expects a crop at 66.5 million bags, not far from the record, adding that such production would generate a global surplus of 3 million bags and cut prices below $2 per pound in 2022. U.S.-based trader Cardiff Coffee sees production at 63.1 million bags.
Paulo Armelin manages a farm with 220 hectares in the Patrocinio area, Minas Gerais, where the frosts were strongest. He said around 20% of his fields were hit by the cold snap and will not produce next year, but the rest was not affected.
"At least in my farm, the flowering was good and conversion to cherries looks fine," he said.
reuters.com/markets/commodities/experts-count-coffee-trees-brazil-prices-hit-10-year-highs-2021-12-13/

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youtube.com/watch?v=O_FmqI7QKck
:D

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Brazil’s Next Coffee Crop Seen Sharply Lower as Prices Soar
22 December 2021

Brazil’s next coffee harvest is expected to come in sharply lower after trees suffered damage from punishing weather early this season. The weak crop outlook has kept global coffee prices hovering around 10-year highs.

Brazil’s intense drought followed by unexpected frosts in June and July killed many young trees and left mature trees struggling to recover. Some producers are bracing for production of Arabica beans, the most popular variety, to decline by as much as 20% to 30% in 2022/23 from 49 million bags (3 million tonnes) produced two years earlier, the previous “on year” of Brazil’s biennial coffee cycle.
Brazil’s coffee growers will be watching in the next few weeks as pinheads and berries emerge on the trees, as this will provide a clearer indication of potential yields. Harvest typically begins in April.
The fate of Brazil’s next coffee harvest is greatly important to coffee roasters and consumers worldwide. Brazil, the biggest Arabica producer and exporter, had one of its weakest harvests in years in the “off year” ended in September, with production estimated to be down 30% year over year.

source:
gro-intelligence.com/insights/brazil-s-next-coffee-crop-seen-sharply-lower-as-prices-soar?utm_campaign=Gro Daily Notes&utm_medium=email&_hsmi=198909767&_hsenc=p2ANqtz-93AnaiAVfCmu5s5D3XFBnd-oQIdWMeGPVOH2MM6hYCAJwzlHXcruba2MjkC_eGrh9LBB-wlPRvO5CrrEKEV3pGNT-B9s0aDQn9eUEp_7f5fkHzr2g&utm_content=198909767&utm_source=hs_email

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Coffee prices on Wednesday moved higher on reduced supplies from Vietnam, the world's top producer of robusta beans and the world's second-largest overall coffee producer. Vietnam's General Statistics Office reported Wednesday that Vietnam's Dec coffee exports fell -6.5% y/y to 130,000 MT and that total Vietnam 2021 coffee exports fell by -2.7% y/y to 1.52 MMT. Surging freight costs and the limited availability of shipping containers have reduced coffee exports from Vietnam.

Wednesday's projection from Ecom Trading for a global 2021/22 coffee deficit of -12.8 mln bags also supported coffee prices. Ecom Trading also projects global 2021/22 coffee production will fall -9.4% y/y to 158 mln bags.

Below-average rain in Brazil has fueled drought concerns and is bullish for coffee prices. Somar Meteorologia reported Monday that Minas Gerais, a region that accounts for about 30% of Brazil's arabica coffee crop, received 11 mm of rain or only 23% of the historical average last week.

from Barchart

+ i think the prices at the moment are weak because of year end repositioning, soon we will see a buy from several tecnical indicators 30.12.2021

Happy new year to all of u

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Emater-MG sees coffee crop in line with 2021, even with positive biennial

Expectations are pessimistic for coffee production in Minas Gerais, even though 2022 is a year of positive bienniality in the culture, which means that the plants will have greater productive potential. The assessment is by Emater-MG, which points out as negative factors the unfavorable climate last year, with prolonged periods of drought and very hot weather at the time of flowering. The coffee plantations had already been damaged by the frosts last winter. According to Emater, possibly the harvest will be at most at the same level as 2021, which was a year of low production.

“Unfortunately, there was a low fruit set and it was restricted in some regions to a single flowering. This was due to some climatic issues that we face here in the south of Minas, such as frost in July and August, and the long dry period, which in some municipalities was longer than 100 days”, said in a note the regional manager of the Company. of Technical Assistance and Rural Extension of the State of Minas Gerais (Emater-MG) in Guaxupé, Willem de Araújo.
“Although the coffee tree needs a little water stress, in the last year this phenomenon was much higher than expected, which led to this low set.” Willem Araújo also informed that the branches and rosettes, where the grains are inserted, are half of what would be expected for this period of the year, which will have a negative impact on the volume of the next harvest. The manager of Emater-MG points out another factor of concern regarding the performance of coffee growing in the State: the scarcity of fertilizers in November and December.

“Many began to perform the first fertilization of the cycle at the end of December, and coffee needs at least three to four fertilizations, during the period of fruit formation until harvest”, he says.

By Estadão Content

source: canalrural.com.br/radar/emater-mg-ve-safra-de-cafe-em-linha-com-2021-mesmo-com-bienalidade-positiva/

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Coffee Market Report
13 Jan 2022

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of December was 358,000 bags or 20.54% lower than the same month last year, at a total of 1,385,000 bags.   This has contributed to the country’s cumulative coffee exports for the first three months of the present October 2021 to September 2022 coffee year to be 817,000 bags or 18.80% lower than the same period in the previous coffee year, at a total of 3,528,000 bags.

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of December were 129,000 bags or 9.85% lower than the same month last year, at a total of 1,180,000 bags.   This has contributed to the country’s cumulative coffee exports for the first three months of the present October 2021 to September 2022 coffee year to be 323,000 bags or 8.92% lower than the same period in the previous coffee year, at a total of 3,298,000 bags.

With the 2021 calendar year complete, the National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the 2021 calendar year was 1,300,000 bags or 9.35% lower than the previous year, at a total of 12,600,000 bags. The report has referenced the civil unrest and protests that took place between May and June as a contributing factor to the decline in coffee production.

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We are on a good way - stocks decreasing and strong consumption in europe - ICE stocks down sharply - I expect respectfully next move

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