BRAZIL’S 2022-23 coffee crop will probably rebound after favorable rains brought relief from drought, according to Ecom Trading, one of the world’s biggest traders of the commodity.

“We are very optimistic about the recovery,” said Jorge Esteve, a vice-president of Ecom’s Brazilian unit in Sao Paulo. “Rains have been very good, above average since September.”

The wold’s biggest producer will collect the high-yielding cycle of the arabica harvest next year. This year’s crop was hurt by dry weather that reduced output to 54.7 million bags from a record above 70 million bags in 2020-21. Brazil’s crop year spans from July through the following June.

Bigger production could replenish depleted stockpiles and clip the rally in prices. Arabica coffee futures surged 62% this year in New York, with tighter supplies in South America compounded by soaring freight costs and a shortage of containers. That’s lifted the cost outlook for companies such that use the beans such as Starbucks Corp. and Nestlé SA.

Yields from farms south Minas Gerais and Alta Mogiana hit hard by frosts in July will still be affected. Other places like Zona da Mata or robusta-growing regions that experienced milder weather should see better crops. Added plantings in places like Bahia and Rondonia should bump robusta production, Esteve said.  

Ecom’s projections tend to be higher than official forecasts in Brazil and are typically more aligned with the US Department of Agriculture. Brazil consumes around 23.6 million bags a year, with exports exceeding 30 million. A bag weighs 60 kilograms.

Like the rest of the world, the nation is dealing with logistical snarls that have held back about 6 million bags from export over the past few months, Esteve said. A trucker-driver strike  this week has delayed shipments to ports, he said. — Bloomberg