Conab slashes Brazilian robusta hopes, after drought damage


Robusta coffee rallied to a 19-month high, as the Brazilian government lowered its estimate of the 2016 crop there, after prolonged dry weather in Espirito Santo.

Conab, the Brazilian government crop supply agency, lowered its forecast for the country's robusta crop to 8.35m bags, down about 1m bags from its previous estimate.

"The result is due to the 4% reduction in the area under cultivation, and especially to drought," Cobab said.

Conabs estimate is well below forecasts from private groups, which range between 11m and 14m tonnes, although the Brazilian government estimates are usually seen as undershooting the real production.

Brazilian think tank IBGE recently pegged robusta prospects at 8.0m bags.

Drought in Espirito Santo

Conab said that "drought and poor distribution of rainfall for two consecutive years in times of flowering, cherry forming and cherry filling," hurt prospects in Espirito Santo, Brazil's main robusta growing state.

Conab also noted the lack of water availability, with irrigation restricted. 70% of Espirito Santo's crop is irrigated.

The dry weather also increased the spread of disease, and reduced use of fertilizer.

The crop supply agency said two dry years had disrupted a long term rise in production, thanks to improved husbandry in the state.

Rising production in Minas Gerais

Overall, Conab trimmed total coffee output at 49.64m bags, down some 30,000 bags from its previous estimate, as rising robusta output largely balanced the falling coffee crop.

This would be up some 15% year on year, although it comes short of analyst estimates.

Production in Minas Gerais, the main growing state, was sharply up year on year, helping total arabica production to rise to 41.30m tonnes, from the 40.27m bags forecast previously.

November robusta futures in London were up 1.7%, at $1,989 a tonne, their highest level since February 2015.

Weaker prospects for next year

But Conab saw production in the state likely to fall next year.

"Due to the high production achieved in major producing regions of the state, the fields are quite depleted at the end of this season, requiring greater investment in fertilizer and sprays to control pests and diseases," Conab said.

"If 2016 has been consolidated as a year of record crop, expectations are that the 2017 harvest presents a significant drop in production".


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