A prolonged spell of dry weather has led to a scaling back of coffee crop estimates for top producer Brazil.
The consensus amongst international coffee trade houses for Brazil's coming 2012/13 crop is around 55 million to 58 million 60-kg bags, down from previous expectations in excess of 60 million.
"It's unquestionable that numbers have been reduced and we're not going to get the 60-65 million bags that maybe we could have got if we'd had exceptionally good weather through September, October, November," a European commodities fund analyst said.
"55-60 million bags is where most people are looking." Brazil's coffee production rises and falls from one year to the next in a biennial cycle.
The forthcoming 2012/13 season is a higher output year, and production may now struggle to significantly exceed the last on-year crop in 2010/11, which the US Department of Agriculture pegged at 54.5 million bags.
"It's very so-so," said Jarbos Diogo Perreira, who grew up in coffee farming and has about 100 hectares of coffee near the northern Sao Paulo town of Sao Sebastiao de Paraiso.
"As the dryness went on for quite a while, not all of the flowers took hold, so I doubt we'll get the same production as two years ago," he added.
Local Brazilian exporter Terra Forte has forecast production at 52.5 million bags, because although the first critical flowering phase was excellent, the exporter said that many of the blossoms had aborted as trees were weakened by a prolonged dry spell this year and bouts of frost.
"In our tour of coffee areas in Brazil in October, we noted that leaves had fallen out of the dryness, even if blossomings had been good," said Kona Haque, an analyst at Macquarie Bank, which has reduced its crop estimate to 56-58 million bags from 60-61 million.
Increased pruning of branches this year will also come at the cost of reduced output for at least a season.
Growers have undertaken more trimming to boost production in the next few seasons, hoping that prices will stay firm for a few years.
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