Brazil coffee crop looks smaller than expected; prices remain at 10-year highs

Coffee drinkers, this probably isn’t what you want to hear.

The Brazil coffee crop is looking smaller than expected, and if that remains true throughout the growing season, it could cause a deficit and sustain coffee prices that are currently around 10-year highs.

Brazil’s government said its farmers will harvest 55.74 million bags of coffee in 2022. That number is 16.8% higher than last year, but experts say that’s a smaller amount than most people in the world’s largest coffee producer were expecting.

Reuters said the smaller-than-expected number is important because Brazil’s coffee production is the key to balancing global supplies.

Total production is going to fall far short of the 2020 record, the previous “on-year” crop, which was estimated at 63 million bags.

Rabobank predicts that Brazil will harvest 63.5 million bags, while Hedge Point Global Markets is guessing 65.8 million bags.