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Fitch Solutions Sees Global Coffee Production Decline 8.2% in 21-22 Year on Year

By: Alexis Rubinstein, Managing Editor - Coffee Network

Fitch Solutions Sees Global Coffee Production Decline 8.2% in 21-22 Year on Year

 
Alexis Rubinstein
Managing Editor 

CoffeeNetwork (New York) – Fitch Solutions has issued a new report highlighting that adverse weather and COVID-19 restrictions will have a negative impact on global coffee production for the 2021-2022 crop.

According to the report, Fitch Solutions forecasts global production for the 2021-2022 crop year at 162.4 million bags, a decline of 8.2% from the previous year and around 2.4 million bags lower than USDA’s estimate.

“The drier-than-usual weather throughout August has weighed on harvesting yields in both Brazil and Colombia,” the report noted, adding that the “ recent imposition of travel restrictions in Vietnam has created supply-side disruption at the port of Ho Chi Minh City.”

In the report, they revised down their production forecast for Brazil’s 2021-2022 crop to 51.5 million bags, down from their previous estimate of 52 million bags. This would represent a decline of 26.3% y-o-y and, if realized, would be the lowest level of production since the 2015/16 agricultural year.

For Vietnam, they revised down their 2021/22 (October to March) forecast to 31.0mn 60kg bags (+6.2% y-o-y, 31.2mn previously) due to the recent introduction of Covid-19 social distancing measures which are disrupting production and trade operations and made it more expensive for plantations to operate.

In Colombia, they downwardly revised their production forecast due to soil damage resulting from the recent dry and cloudy weather. The risks to this forecast lie firmly to the downside. Firstly, the ongoing Covid-19 pandemic could lead to labour shortages on coffee plantations and unharvested crops. The WHO recently added the 'Mu' variant, first discovered in Colombia, to its 'variants of interest' and the government may soon tighten social distancing measures even further if there are concerns regarding vaccine efficacy.

“The relatively high prevailing prices should encourage more plantings and harvestings outside of Brazil, Vietnam and Colombia in the near future,” the report said “The ongoing labour and operational problems associated with Covid-19 mean that the risks to production are skewed to the downside this season. However, providing that these issues are overcome, high prices this season should ultimately help global output rebound in 2022/23.”

Global & Selected Countries - Coffee Production (2019-2025)

Geography

Indicator

2019

2020

2021f

2022f

2023f

2024f

2025f

Global

Coffee Production, mn bags

176.0

168.0

176.9

162.4

174.7

173.0

184.3

Global

Coffee Production, mn bags, % y-o-y

10.1

-4.5

5.3

-8.2

7.6

-1.0

6.5

Vietnam

Coffee production, '000 60kg bags

30,400.0

31,300.0

29,200.0

31,000.0

32,000.0

32,480.0

32,967.2

Vietnam

Coffee production, % y-o-y

3.8

3.0

-6.7

6.2

3.2

1.5

1.5

Brazil

Coffee production, '000 60kg bags

66,500.0

60,500.0

69,900.0

51,500.0

60,000.0

55,227.4

63,586.7

Brazil

Coffee production, % y-o-y

27.6

-9.0

15.5

-26.3

16.5

-8.0

15.1

Colombia

Coffee production, '000 60kg bags

13,870.0

14,100.0

14,200.0

14,000.0

14,983.0

15,365.0

15,747.0

Colombia

Coffee production, % y-o-y

0.3

1.7

0.7

-1.4

7.0

2.5

2.5

e/f = Fitch Solutions estimate/forecast. Source: USDA, Fitch Solutions

        

 

Alexis Rubinstein

 
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