Two weeks ago it was reported that Brazil’s coffee crop might not have been as severely affected from drought as first thought, however forecasts are shifting once again pointing to more significant damage. Estimates vary widely, but forecasts from the Sao Sebastiao do Paraiso co-operative in Minas Gerais, Brazil’s top coffee producing state, point to a harvest of 2.45 – 2.5 million bags – 500,000 bags less than an original estimate of 3 million bags. Overall reports are of small or malformed beans with 600-700 liters of beans needed to fill a 60 kilogram bag rather than the usual 400-500 liters. Since coffee beans are produced on vegetation grown the previous season, the drought this year will likely affect the 2015 harvest as well. Compounding the outlook from Brazil, coffee production in Vietnam is forecast to decline 4% to 1.64 million tons according to a Bloomberg survey. After two straight years of high production, dry weather combined with tree stress are expected to curtail output.
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