World coffee production down 9% on year
Stocks in producing countries at historic lows
The June 2007 USDA FAS circular on tropical products released last Friday focuses on the coffee market with the first estimate of world production for 2007/08. Here are the highlights.
World production in 2007/08 is forecast at 118.9 million bags, down 12.5 million bags, or 9 percent, from the revised 2006/07 level of 131.3 million bags. Most of the reduction is attributed to Brazil, where coffee production in 2007/08 is forecast at 36.2 million bags, versus 46.7 million bags the previous year. World exports of coffee in 2007/08 are forecast at 93.7 million bags, down 4.2 million bags, or 4 percent from the 2006/07 level.
Brazil’s exports of coffee in 2007/08 are forecast at 24.0 million bags, down from 28.3 million in 2006/07. World coffee stocks in 2007/08 in producing-exporting countries are forecast to decline to a low level of 16.8 million bags, mainly the result of lower supplies in Brazil. This is the lowest level of stocks recorded in the USDA database dating back to 1960/61. Coffee prices have weakened somewhat recently, but are still significantly above the historic lows of 2002.
Brazil in off-year
Brazil’s coffee production for marketing year (MY) 2007/08 (July-June) is 36.2 million bags, down 22 percent, or 10.5 million bags, compared to the previous year. Arabica production is forecast at 25.65 million bags, a 29-percent decline from the previous season while robusta production is forecast at 10.55 million bags, similar to last year. The lower arabica production is a result of: trees being mostly in the off-year of the biennial production cycle; in spite of good crop management, plants are somewhat stressed by the very high 2006 production; and the blossoming for some regions was somewhat delayed due to poor rainfall during August-September 2006. Robusta production should remain stable as a consequence of good weather that prevailed in the growing regions and good crop management due to favourable prices, especially in the state of Espirito Santo.
Vietnam’s coffee production for 2007/2008 is forecast to decline 5 percent, or 930,000 bags, to 17.7 million bags due to expected dryer conditions. The government continues to encourage farmers in marginal-growing areas to replace coffee with crops better suited to the soil. However, in the face of current high prices, farmers continue to expand their robusta cultivation, and where possible, also arabica production. Vietnam’s exports of coffee are forecast at 16.8 million bags, down from the preliminary estimate of 17.6 million bags during 2006/07.
Colombia’s coffee production in 2007/08 is expected to increase from the previous year by 200,000 bags, to 12.4 million bags. The growth in production is mainly the result of a tree renovation program and expanded planted areas of coffee in the southern region of Colombia. Colombia’s coffee production growth has been sustained over the past several years mainly due to the coffee-tree renovation program, developed between 1998 and 2004, under FEDECAFE, which brought around
Mexico’s coffee production during 2007/08 is forecast at 4.5 million 60-kilogram bags, an increase of 7 percent over last year. The Mexican coffee sector is in the first year of a 10-year plan to stimulate domestic coffee consumption, and de-emphasize efforts to sell on international markets. Currently 70 percent of Mexican coffee is exported, and 30 percent is consumed domestically. Industry leaders have set a goal of reversing these numbers, with 70 percent of Mexican coffee to be consumed domestically, and 30 percent to be directed to the export market.
The report can be downloaded at the following URL:
http://www.fas.usda.gov/htp/tropical/2007/June%202007/June%20Tropical.pdf
[tags]world coffee production, world coffee stocks, coffee futures, coffee stocks, coffee production, coffee forecast [/tags]
