Roberto Samora and Marcelo Teixeira

NEW YORK/SAO PAULO – A tour of the coffee belt by commodity traders in Brazil’s Minas Gerais is being conducted by coffee experts. They are assessing 2022 crop prospects and prices as the country approaches its highest level in 10 years.

Brazil’s biggest coffee grower, Brazil, has had a tough year. The drought caused coffee prices to rise and frosts later on ruined up to 20% of coffee trees. Future production was also affected. Although the estimates of 2022’s harvest have been made by researchers, traders are still betting that it will be lower than expected.

People walking in the fields will see the truth. This is the best time to assess crop potential.

Ryan Delany of the Coffee Trading Academy LLC, U.S. chief analyst said, “The rains following the frosts, drought, produced a nice blooming. But now, we need to see how many cherries will grow from those.”

After the global drought and frosts that caused shipping problems, Arabica coffee futures traded on ICE (NYSE): More than 90% of this year’s gains were achieved by ICE (NYSE). Brazil, Colombia, and other countries were forced to stop delivering pre-sold coffee due to the price rise.

Experts count pinhead cherries from the branches during the tours to provide more precise projections. Estimates released thus far are varied.

Judy Ganes (soft commodities analyst) was in Brazil recently with Shawn Hackett. They estimated Brazil’s production of arabica at approximately 36 million bags. This is one the lowest projections on the market.

Ganes believes that the drought and the frosts caused the tree’s poor vegetative health. This is something other people aren’t fully accounting for. Brazil’s entire crop including the robusta varieties will be 55 million bags. That is far less than the record 2020 crop.

Jonas Ferraresso is a Brazilian coffee agronomist. He says that although the October rains made the flowers more widespread, the fruit conversion was lower than normal.

He said that many trees had new leaves instead of fruit, which was probably due to earlier droughts.

Some are more optimistic.

Rabobank is a specialist in agricultural finance and expects to produce 66.5 million bags. This would be close to the previous record. In addition, such production would create a global surplus, 3 million bags, and lower prices than $2/pound by 2022. Cardiff Coffee in the U.S. sees production of 63.1 millions bags.

Paulo Armelin runs a 220-hectare farm in Minas Gerais. It is located in Patrocinio, Minas Gerais. Here the frosts are strongest. He estimated that around 20% of his fields suffered from the cold snap. However, the remainder were unaffected.

He stated, “At minimum in my farm the flowering and conversion to cherry looks good.”