Coffee & Alternative Data

Coffee & Alternative Data

Alternative data helps in the pricing of coffee on the world market

Coffee drying in the sun. Doka Plantation Costa Rica

Data analyst says there is still room for technological evolution in coffee farming

Consumers increasingly value the quality of coffee, whether in Brazil or any other country in the world.

Therefore, producers invest more in technology and differentiated information to obtain a quality product and increase productivity and efficiency.

This is where alternative data comes in.

Moreover, more detailed information that will guide producers in making more assertive decisions in each process of coffee growing. As a result, in Brazil, the world’s largest producer and exporter of coffee, the information extracted from these data makes a difference.

Data on climate or rainfall, for example, influence the producer’s decision to plant trees or trimming at the right time.
Sorting coffee in water

Data analyst and agro-industrial economist Ricardo Pereira says that “the coffee producer historically follows the rainfall data in their region. Some have a rain gauge on the farm and monitor it daily to make strategic decisions”.

Another alternative data used by coffee producers is the evapotranspiration coefficient. Which is the loss of water from the soil by evaporation and the loss of water from the plant by transpiration. Furthermore, with the knowledge of this number, the producer can design and manage irrigation systems. Ricardo Pereira, who has experience with coffee exporters, says that “this index is important to understand the “stickiness” of the flowering”.

In addition, the expert explains that alternative data also help in the pricing of coffee on the market. According to him, exporters have research teams all over the world and carry out field analysis, *in loco*, to anticipate the market.

“These surveys show how much coffee exists within each structure (farm). The information gathered will help in the estimation of the harvest and will indicate the direction of the market price. Since coffee is a commodity and is priced according to the law of supply and demand”.
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Allied to alternative data, Ricardo Pereira highlights the work of data collected by various Brazilian organizations. The Brazilian Agricultural Research Corporation (Embrapa) plays a fundamental role, through Procafé, with research and projects that help increase productivity, quality, and even indicate the best structure for each farm.

The National Supply Company (Conab) estimates coffee production by regions in Brazil and the Brazilian Institute of Geography and Statistics (IBGE) is responsible for surveying the coffee production area by city. Cooperatives also do an important job of collecting data from producers in their areas of operation.

Despite the use of so much data, the expert concludes that “an evolution of technology is needed to be applied in the coffee culture”. With new investments and technology, coffee production in Brazil can advance further.

Coffee & Alternative Data

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