Coffee exporter Comexim sees record Brazilian crop this year

SAO PAULO (Reuters) - Brazilian farmers are on the way to produce a record coffee crop in 2020, surpassing the previous record reported in 2018, coffee exporter Comexim said in a projection released to clients late on Monday.

Comexim estimates Brazil will produce 67.7 million 60-kg bags of coffee this year, compared with 56.8 million bags in 2019 and the previous record of 64.5 million bags produced in 2018 (a revised upward estimate).

Brazil alternates years of higher and lower coffee outputs, due to a characteristic of arabica coffee trees. The fields will return to full production in 2020, after an “off-year” in 2019.

Despite the projection for a record crop, the exporter said initial ideas of a crop surpassing 70 million bags - that had circulated in the market due to the fact of new areas coming to production and an ample flowering - did not materialize.

“The late arrival of rains, as well as high temperatures and below-average rainfall during October and November - after the July frost that also affected some areas - shaved down the once expected 70+ million bags crop,” Comexim said.

The company said that, despite the record, the numbers should not be read as bearish. “Quite the contrary”, it said, expecting a global surplus in the 2020-21 crop cycle (July-June) of only 3.5 million bags and the prospect of an “off-year” in Brazil, the world’s largest producer, in 2021.

Comexim said that the 50% rally seen in New York coffee futures late last year “uncovered coffees being held not only from one crop, but from three”, so it had to adjust up its carry-over numbers from previous crops.

Finally, Comexim said it was wrong to assess that quality issues from the 2019 Brazilian crop were not as challenging as some people were stating.

Brazil will start to harvest its new coffee crop around April or May, depending on the region, and ready-to-be-shipped lots will be available around June or July.

(This story corrects paragraphs 1 and 8 to refer to Comexim as an export-import company and not a broker)

Reporting by Marcelo Teixeira; Editing by Marguerita Choy