The final figures for the Brazilian coffee crop 2020 are expected to be below expectations at the beginning of the season. According to the Safras & Mercado consultancy, the final production of the harvest should not meet domestic consumption and exports.
For 2021, the prognosis is still uncertain, with the only certainty that the production volume will be lower due to the biannual cycle of Arabica coffee. The reference number is 60 million bags, an insufficient volume to serve an export of 40 million bags and a domestic consumption of 23 million bags.
Despite the new cycle pointing to a smaller crop in Brazil, the market has not yet priced this fact. For the consultancy, chances are that dollar prices will rise from now on. The more the estimates were below the 60 million bags line, the more potential for gain in quotes. In relation to prices in reais, the consultancy points out that the values will depend on the behavior of the exchange rate next year.
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