Brazil’s government has acknowledged that estimates of coffee harvests in recent years have problems and need improvement to better reflect reality, as production figures were lower than the sum of local consumption plus exports, according to Reuters.
In an interview with Reuters, Sergio De Zen, director of agricultural policy at Brazil’s food supply and statistics agency Conab, said that because of these discrepancies, there is a process to revise the numbers and methodology for Conab’s forecasts on coffee harvests.
Conab’s coffee figures for Brazil, the world’s largest producer and exporter, have been the subject of debate for years among coffee traders and analysts, who generally believe the production estimates are too low.
Higher crop numbers for Brazil than Conab
Trading houses and independent analysts typically have higher crop figures for Brazil than Conab. For this year, for example, while Conab estimates a harvest of 50.4 million 60 kg bags, the US Department of Agriculture (USDA) expects 64.3 million, Rabobank 63.2 million, and the consulting Safras & Mercado at 58.2 million bags.
“We’ve been talking to cooperatives, farmers and exporters, trying to work together so we can have a harvest projection that better reflects reality,” De Zen said.
The executive’s comments came after Reuters questioned Conab’s forecasts with Brazil’s consumption and export figures. There is a clear gap in terms of supply when they are compared.
Farm stocks are not negligible
When the figures for local consumption plus exports are compared with harvest forecasts for the past five years, there is a large shortfall of more than 32 million bags, according to Reuters calculations.
“I’ve done this calculation before…” the director said, acknowledging the problem.
Stock figures could help solve the equation, but Conab has stopped publishing them.
“We haven’t published them because a supply balance calculation doesn’t make sense,” he said, confirming the shortfall.
De Zen said, however, that farm stocks were not negligible and could help solve the S&D equation, but noted that the number and quality of responses to the stock survey were low.
What is being done to boost the coffee projection?
The director said Conab plans to revise the figures for crops in recent years, just as it did with soybean data in 2020, when the revision resulted in millions of tonnes being added to the S&D table.
He partly blamed the problems on the poor state of Conab’s structure when the current government took over four years ago.
He said Conab is hiring people to boost the projection on coffee, adding that it will use satellite data to better measure the area planted and improve the calculation of agricultural yields.