20th July, 2011

 
The Brazilian Crop is on!!! 

 

Christian does the Brazilian Coffee belt!

 

 

 Only a short week after returning from 30 days traveling through the Brazilian Soft Arabica Belt, it is now time to share what I saw and learned. The areas visited were the Sao Paulo Mogiana and Alta Paulista, South of Minas Gerais, Cerrado, Matas de Minas and Bahia. In all regions, I found a main common point: a very uniform and intense maturation during the period June 10 thru July 12 when I left the country.

 

Another noticeable factor was how Brazilian producers have invested heavily in pulping units and drying patio space. I have never seen so many brand new washing and pulping stations!  The weather this harvest season has been better than ideal and more than 50% of the crop is already  home, at least this part will taste fantastic! 

 

Brazilwill probably produce over 6 million bags of pulped Natural preparation this year. If this trend continues, soon we will have to pay premiums for the fine cup "Natural Preparation " over the Pulped preps! A highlight in this trip was learning that in three important regions of the soft coffee belt "Precision Agriculture" is being used. This technology uses GPS mapping for soil sampling and analysis.

 

 

 The new technique in coffee allows an absolutely correct soil treatment and enrichment or correction on micro and nano areas avoiding, for example, over- fertilization and intoxication of the soil in areas that already contain certain fertilizer residue or excess of certain natural elements. Before this technology, the same fertilizer blend was applied over  much larger areas called a "Talhao" or land block. This area usually has 5 to 25 hectares and most times a single soil sample per block will misrepresent the fertilizer correction or input needed.

 

Brazilian coffee agriculture is renewing itself by mission and vision

and must do so as it's planted area has been reduced substantially in the last decade. While the planted park fell from 3 million hectares in 2000 to 2.2 million actually, productivity increased from 13 bags/132 lbs green/hectare to 22 bags green currently.    

 

Crop competition and 13 years of low prices will still produce a loss of another 200.000 hectares within the next 2 years before we see the Brazilian planted area stabilize or even start to grow again.

 

The answer is "Productivity" and the locals know this. I saw farms with aging plantations producing 75 bags green per hectare and other young 3 year old plantations producing 100 bags green per Hectare!

     

Christian and producer Jose Carlos Grossi in Patrocinio area

 

 Now, let's not get so excited about these very high yields. They are not general and they are only an example of where Brazil is going with its coffee agriculture. Sugar cane is the big solution  for many land owners but also the big villain for the coffee industry and  traditional coffee producers. In many places, one can extract 2 cane crops per year  and still choose to refine it for sugar or distill for ethanol, even do both!

 

Asides from Sugar cane, other  yearly and 2X p/year or rotating crops such as Soya, Pupunha Palm Hart, Eucalyptus, Cotton and Corn are all strong competitors for the same areas where coffee exists and can be planted. 

 

To believe in an expansion of the coffee planted area in Brazil, one must be patient, in my mind, it will take another 4 - 6 years with high prices before we can notice any increase. As I mentioned above, the park will still shrink before  stabilizing and eventually growing again.

 

Meanwhile, we have to deal with the current state of supply and hope for a great flowering with a promise of a abundant harvest in volume and quality  for the 2012/13 crop cycle.

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Some numbers I estimated and released on my News Letter June 6th 2010:

  

July 1rst, 2010 crop + carry-over in 60 kg bags 

56 million 60 kg bgs Jly 1st/10 availability for the 10/11 crop cycle 

20 million bags internal demand

29 million exports

07 million Carryover balance June 30, 2011

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42 million expected for the 2011/2012 crop

07 million carryover June 30, 2011

49 million availability for the 2011/2012 crop cycle

21 million expected internal demand

27 million expected exports

01 million carry-over June 30carry. 2012

 

On this same report, I also estimated:

"As seen above,   my estimates show a relatively tight supply and demand situation regarding Brazil coffees for the coming 24 months".  

 

 

 

Fazenda Monte Alegre

Drying Patio, one could land a small plane here!

 

  

Now, what really happened in the 2010/11 crop cycle and the flow into the 11/12 cycle:

 

56 million 60 KG bags available Jly1st/10 for 10/11 supply cycle

19 million internal Brazilian consumption

34.9 mill  registered exports green/soluble/roasted 

02.1 Carry-over July 1st/11 (incl Government stocks of 1.4 ) .

 

My estimate for this 2011/12 crop now is 1 million bags shorter than previously expected, it supports my vision of an evident supply squeeze soon.

 

41 million bags crop 2011/12 (13 Conilon/28 Arabica)

02.1 mill carry-over July 1rst/11

43.1 Total availability July 1rst/11

20 million bags internal market (50% already roasted )

30 mill exports as target of exporters (65% already sold totaling about 19.5 million bags)

06.9 mill is the potential deficit to happen starting January thru June 30th 2012.

 

If my numbers are correct, not only will we run into a historic deficit in Brazil, but differentials will also go thru the roof as Exporters and local Brazilian roasters scramble for the very few coffees available in the first half of 2012.



 

Another critical but evident fact, is that many producers have made substantial revenue and profit from coffee sales in 2011, these must wait to sell and only make additional revenue on the next fiscal year, for once in decades, they can afford to do so.

 

Lets now keep our eyes and ears open regarding the end of the Frost season in Brazil now by August 15th and hope that rains resume by September promoting a rich flowering a fruit fixation..

 

From Wolthers & Vittrup & Associates Colombia/Bogota, our Director of Quality  Hector Posada informs:

 

June harvest showed a reduction of 40% in volume compared to the same period last year.

 

 780.000 bags of 60KG were produced in June 2010 against only 471.000 bags this June 2011.

 

Exports have also fallen by 12% comparing the same period of June/10 X June/11.

Excessive rains during this season have been responsible for the reduction of productivity.

 

 

From Wolthers - Vittrup & Associates Guatemala/Guatemala City, our Director of Quality Guillermo Huezo informs:

 

Just about 80% of the current crop has already been shipped and local warehouses confirm the low volume of remaining inventory just enough to comply with shipment commitments.

The rainy season has been quite normal sustaining the fruit growth and promising another normal crop, volume should be around the 3.5 million bags, hopefully a bit larger.

 

General elections in the country now during next September have left most economic sectors in alert due to internal violence and lack of security, the coffee sector has not escaped from this situation.

 

Transporting coffee from the farmlands to shipping terminals is a quite risky commute these days and hired security is necessary to avoid robberies of such valuable cargos, this has had a noticeable impact increasing internal costs substantially.    

 

 

From Hawaii, the Parry Estate in Kona informs:

 

The rains over the Hawaiian Islands this season have been specially kind to the kona region coffee plantations and fruitification is solid and uniform.

 

A Better quality and relativelly bigger crop is expected for this season, Harvest at the Estate will start on the selective model by mid August and should last thru december this year. 

Samples of the new crop will be available by end October, don't hesitate to request some, this is the single best farm inthe islands!!  

 

 

Will keep you posted as new great coffees arrive, meanwhile, check our offer list attached for the current available coffees.

 

Best regards,

Christian.   

 

 

  
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Pulping unit and patio in Araguari 

The machine that produces for 300 pickers/day  

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Mechanically separated floaters from cherry fruits  

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Uniform mature fruits headed to the pulpers  

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Cupping with Nucoffee partners at Expocaccer in Patrocinio 

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Manicured coffee ranks in the foot of Serra do Salitre  

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Cupping Veloso farms new crop, amazing!!  

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Roberta Armentano from Nucoffee walking the coffee walk  

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Octavio Cafe/O'Coffee washing unit  

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Edgard Bressani Hosting under the coffee Bins  

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Harvester filling the big bags prior to pulping  

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Sunset at the farm house faz. Monte Alegre  

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Hidden collection somewhere in Minas Gerais 

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Separated cherry and unripes before pulping  

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Jose Francisco and Judith de Boer riding the Harvester/Fazenda Monte Alegre

 

Jaques Robson, Nucoffee Q Grader playing H-Metal in Varginha  

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Marco Valerio at his washing and pulping unit 
South Minas Gerais

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Visiting my good friend Edgard Bressani at O'Coffee in the higher Mogiana

 
Riding the Harvesting machine at Fazenda Monte Alegre

 

 
6th generation multiple color sorters at Exportadora Guaxupe

 

 
The style survives!

 

 
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Paulo Veloso Jnr. overlooking his drying patio in Carmo do Paranaiba 

Christian Wolthers
Wolthers America Inc.
P# 954-7970078 / F# 954-3219266
[email protected]
Fort Lauderdale, FL 33316

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CONTRACT

QUALITY

BAGS

DESTINATION LOCATION

P0118-A

SNU019/10

 

Brazil, NuCoffee Sts, Scr 16/17/18, NY 2's, SS, FC, Cerrado/South Minas 50/50% blend, Crop 2010/2011

 

165

Costa Oro, Portland

P0133

SNU001/10

 

Brasil, NuCoffee Micro Lots, Scr 18, Santo Antonio Farm, Crop 2009/2010

3

The Annex, San Leandro

P0224

SNU130/10

Brasil, NuCoffee Superior 2/3, Scr 14/15/16, SS, FC, Crop 2010/2011, SCAA 75-79 Points Score

30

Econocaribe, Miami

P0230

SNU003/10

 

Brazil, NuCoffee Grinders, Scr 13/18, Soft, Uniform Cup, Natural Preparation, Crop 2010/2011

187

Econocaribe, Miami

P0232-A

SNU005/10

 

Brazil, NuCoffee Micro Lots, Scr 17/18, Crop 2010/2011, Olhos D'Agua Farm, South of Minas Region, 84 Points Score

38

 

Green Room , Seattle

 

P0232-B

SNU005/10

 

Brazil, NuCoffee Micro Lots, Scr 17/18, Crop 2010/2011, Boa Vista Farm, East of Minas Region, 83.25 Points Score

51

 

Green Room , Seattle

 

P0232-D

SNU005/10

 

Brazil, NuCoffee Micro Lots, Scr 17/18, Crop 2010/2011, Vicosa Farm, East of Minas Region, 81 Points Score

50

 

Green Room , Seattle

 

P0232-E

SNU005/10

 

Brazil, NuCoffee Micro Lots, Scr 17/18, Crop 2010/2011, Sao Sebastian Farm, Cerrado of Minas Region, 82.75 Points Score

31

 

Green Room , Seattle

 

P0245A

SNU006/10

 

Brazil, NuCoffee Micro Lots, Scr 17/18, Crop 2010/2011, Olhos DAgua Farm, South of Minas Region, 82.75 Points Score

53

 

The Annex, Oakland

P0245C

SNU006/10

 

Brazil, NuCoffee Micro Lots, Scr 17/18, Crop 2010/2011, Sao Paulo Farm, South of Minas Region, 82.75 Points Score

36

 

The Annex, Oakland

P0259A

SNU007/10

 

Brazil, NuCoffee Micro Lots, Scr 16/18, NY 2/3, Fine Cup, SS, Crop 2010/2011, Candeia Farm, South of Minas Gerais, 85 Points Score

27

 

Dupuy,

Houston

P0259C

SNU007/10

 

Brazil, NuCoffee Micro Lots, Scr 16/18, NY2/3, Fine Cup, SS, Crop 2010/2011, Cava Farm, South of Minas Region, 83 Points Score

35

 

Dupuy,

Houston

P0259D

SNU 007/10

 

Brazil, NuCoffee Micro Lots, Scr 16/18, NY 2/3 Crop 2010/2011, Formiga Farm, South of Minas Region, 83.50 Points Score

12

 

Dupuy,

Houston

P0259E

SNU007/10

 

Brazil, NuCoffee Micro Lots, Scr 16/18, NY 2/3 Crop 2010/2011, Formiga Farm, South of Minas Region, 83.25 Points Score

72

 

Dupuy,

Houston

P0259H

SNU007/10

 

Brazil, NuCoffee Micro Lots, Scr 16/18, NY 2/3, FC, SS, Crop 2010/2011, Santa Alina Farm, Mogiana Region, 84.50 Points Score

7

 

Dupuy,

Houston

P0259I

SNU007/10

 

Brazil, NuCoffee Micro Lots, Scr 16/18, NY 2/3, FC, SS, Crop 2010/2011, Santa Mariana, South of Minas Region, 84.25 Points Score

7

 

Dupuy,

Houston

P0259J

SNU007/10

 

Brazil, NuCoffee Micro Lots, Scr 16/18, NY 2/3, FC, SS, Crop 2010/2011, Santa Mariana Farm, South of Minas Region, 83.25 Points Score

25

 

Dupuy,

Houston

P0259K

SNU007/10

 

Brazil, NuCoffee Micro Lots, Scr 16/18, NY 2/3, FC, SS, Crop 2010/2011, Alina Farm, Mogiana Region, 84.25 Points Score

85

Dupuy,

Houston

P0278A

SNU008/10

 

Brazil, NuCoffee Micro Lots, Scr 17/18, NY 2/3, FC, SS, Crop 2010/2011, Sao Paulo Farm, South of Minas Region, 82.75 Points Score

50

The Annex, San Leandro

P0278C

SNU008/10

 

Brazil, NuCoffee Micro Lots, Scr 17/18, NY 2/3, FC, SS, Crop 2010/2011, Jaraguaia Farm, South of Minas Region, 83.50 Points Score

6

The Annex, San Leandro

P0278D

SNU008/10

 

Brazil, NuCoffee Micro Lots, Scr 17/18, NY 2/3, FC, SS, Crop 2010/2011, Santa Izabel Farm, South of Minas Region, 83.25 Points Score

21

The Annex, San Leandro

P0278F

SNU008/10

 

Brazil, NuCoffee Micro Lots, Scr 16/18, NY 2/3, FC, SS, Crop Mogiana Region, 84.25 Points Score

40

The Annex, San Leandro

P0295

SNU001/11

 

Brazil, NuCoffee Grinders, Scr 13/18, Soft Uniform Cup, Natural Preparation, Crop 2010/2011

638

Continental, NJ

P0296

SNU002/11

 

Brazil, NuCoffee Grinders, Scr 13/18, Soft Uniform Cup, Natural Preparation, Crop 2010/2011

629

Colmar, Miami