Without a doubt, Brazil plays a leading role in terms of the production of commodities on the international stage, with coffee being one of the greatest examples of its leading role. Together with Colombia and Vietnam, the country occupies the position of largest coffee producer in the world, with the main buyers being the United States, Japan, Germany and Italy.

Super harvest in 2020 favors exports for the following years

    Despite the atypical year 2020, to the detriment of the coronavirus pandemic, the coffee growing market suffered a drop of only 1% compared to 2019, according to the Coffee Trade Center of the State of Minas Gerais (CCCMG), which halted growth of 2% a year over the past five years. In addition, in recent months, Brazilian production has benefited from abundant rainfall that resulted in a total of 8.1 million bags in the super harvest in November.

    After closing the year 2020 on a high note, forecasts for 2021 are positive, according to  Lúcio Dias, commercial director of the Cooxupé cooperative, who said: "It is natural for a year of strong exports to come after a year of super harvest." Therefore, exports will remain firm and Brazil will have enough grain to meet demand, reiterates Nelson Carvalhaes, president of Cecafé.

Binuality and dry weather affect the 2021/2022 crop

   However, expectations for the next harvest are low due to excessive heat and lack of rain in important producing regions. According to Marx Solutions,  production in the main growing areas is expected to fall between 30% and 50% in 2021. The forecasts are close to 53 million bags, a drop of 22.45% compared to the production of the 2020/2021 harvest, according to Cecafé.

High prices due to the contrast between supply and demand

   Therefore, after a year of super harvest and good prices in the coffee market, production for the year 2021 tends to reduce as a consequence of the dry climate and the biannuality of the bean. On the other hand, Brazilian exports are expected to remain high, as well as prices which, due to high international demand and the low supply for the next harvests, tend to rise.  

Importance of an international consultancy

    Therefore, the market is full of possibilities for those interested in investing in the coffee market. In this sense, an international consultancy service would be extremely favorable as it would help interested parties to find the best opportunities and close good deals abroad.

By Annaluisa Lima on 01/21/2021

Sources:

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Coffee: expectations and opportunities in the coffee market