Brazilian Coffee Farmers Invest in Yield Improvement, Cepea Says
Coffee producers in Brazil, the world’s largest grower, are investing in quality and yield improvement after prices soared in the past year, according to Cepea, a university of Sao Paulo research group.
The price of arabica coffee, used in specialty drinks such as those made by Starbucks Corp., has risen 96 percent over the past year. Heavy rains in Colombia, the world’s second-largest producer of the variety, have damaged crops, helping send prices to a 14-year high of $3.089 a pound on May 3.
Higher coffee prices in the second-half of 2010 and this year have led producers to expand production, Cepea analyst Margarete Boteon wrote in a report yesterday. “In some regions, such as the Cerrado mineiro, this advance might mean an increase in the planted area. In most areas, however, coffee growers may invest preferably in quality, yield and in the renewal of crops.”
Milder temperatures in Brazil’s coffee-producing region are slowing maturation and fermentation, which may lead to better- quality beans, weather forecaster Somar Meteorologia said in a report last month.
“Brazilian coffee producers are enthusiastic about the quality of the first coffees that are arriving at coffee yards,” broker Escritorio Carvalhaes wrote in a report e-mailed on June 6. “Cherries ripened uniformly and favorable climate conditions contributed.”
A shortage of fine cups, as higher quality beans are known, earlier this year lifted the price of coffee traded on Brazil’s futures exchange BM&F Bovespa above that of beans on ICE Futures U.S. in New York for the first time since at least 1999, data on Bloomberg showed.
Brazilian coffee output will drop to 43.5 million bags this year from 48.1 million bags last year as trees enter the lower- yielding half of a two-year cycle, the Agriculture Ministry’s crop-forecasting agency, known as Conab said in May.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.
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