Ferreira warns that the global coffee surplus will fall to 8 million bags due to low productivity
Quick Look
Coffee expert Ferreira warned that the global production surplus may decline from 10 million to 8 million bags due to lower productivity, especially in Brazil, and explained that producers may postpone sales waiting for higher prices, while importers seek to increase their purchases of competitive Brazilian coffee.
AI-generated summary
Why It Matters
Expert Ferreira talks about the expectations of global surplus coffee production and the impact of low productivity, especially in Brazil, on the size of the surplus and the behavior of producers and importers in the market.
Ferreira said that the surplus may reach about 10 million bags (the weight of a bag is 60 kilograms), but it may decline to approximately 8 million due to low productivity, including in Brazil, the largest coffee producer in the world.
He pointed out that the expected surplus will not necessarily lead to a rapid influx of large quantities of coffee to global markets, explaining that the financial conditions of Brazilian producers allow them to postpone the sale of part of the new crop while waiting for prices to rise.
He added that producers will release the crop gradually to take advantage of periods of high prices, with the possibility of suspending sales when prices decline.
Ferreira explained that the lower prices of futures contracts for late deliveries, compared to the contracts closest to maturity, also limits sales, which may lead to part of the surplus stocks remaining in producing countries.
He stressed that importers are seeking to increase their purchases of Brazilian coffee, which is still the most competitive, but current market conditions may prevent the entire surplus from being transferred to importing countries.
What to Watch
AI outlook — possibilities, not facts
Brazilian producers will postpone selling part of the new crop while waiting for prices to rise
Likely · Within weeks
Producers will roll out the crop gradually to take advantage of periods of high prices
Likely · Within months
Open Questions
- What is the current actual production volume in Brazil and other producing countries?
- To what extent can weather conditions affect productivity in the upcoming season?
- What policies might producing countries follow to manage stocks?
