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 down 5%

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 slightly higher;  Renovation program under way

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 400,000 hectares into renovated production. FEDECAFE is now planning the second coffee-tree renovation program over the next five years. Under the new program, FEDECAFE is expected to renew approximately 60,000 hectares per year. It is estimated that at the end of the program in 2013, Colombia will add another 3 million bags to total annual coffee production.

Colombia is expected to increase coffee exports to 11.7 million bags, from 11.3 million bags the year before. Of the total forecast for 2007/08, Colombia is forecast to export 10.8 million bags of green coffee, 100,000 bags of roasted coffee and 800,000 bags of soluble coffee.

Mexico promotes domestic consumption

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]

Poor farming methods hampering coffee yields Nairobi The coffee industry is struggling to realise its full production potential because growers, especially the small-holders, are not embracing proper crop husbandry practices, a new study has revealed. This situation  has exposed the industry even to higher risks as diseases such as Coffee Berry Disease (CBD) and Coffee Leaf Rust (CLR) continued to proliferate at alarming levels. The study falls under the second phase of the Kenya Coffee Data Collection and Information Dissemination Project over seen by the Trade and Industry ministry with support from the World Bank and managed by a leading consulting firm, Deloitte and Touche. A notable finding from the research is that cases of CBD have been on the rise with prevalence rates climbing to about 36 per cent against last year’s level of 30 per cent— a trend analysts blamed on erratic weather patterns that have been experienced over the production season. Notable areas affected by the berry disease included Embu, Kirinyaga and Nyeri. Researchers say a cold wet spell alternating with warm moist periods is likely to increase the threat of the berry disease even though protection measures such as spraying using Captafol and copper-based fungicides  could mitigate its effects. Producers in Kenya however have access to a special coffee hybrid known as the Ruiru 11 which is highly resistant to both CBD and CLR. “Coffee Leaf Rust was also recorded in active state in virtually all coffee growing areas except Machakos and Makueni. The disease is apparently becoming a major factor and may constrain coffee production and quality it not contained,” the study report warned. Researchers said lack of access to credit facilities has been the major drawback towards the implementation of sound husbandry practices but expressed optimism that the recently launched Coffee Development Fund (CoDF) could redress the constraint. Overall the study estimates that the country will produce 54,000 metric tonnes of coffee in the 2007/08 crop season with small-holders and estates churning in 33,500 metric tonnes and 20,500 metric tonnes respectively Source: Business DailyAfrica [tags]coffee, coffee prices, coffee yields, coffee industry, coffee data, Africa coffee, Kenya coffee[/tags]

Rio de Janeiro – According to the Brazilian Coffee Industry Association (ABIC), Brazil’s domestic consumption could rise from 16.33 million bags in 2006 to over 21 million in 2010 making this country the world’s largest consumer of the commodity, ahead of the

United States.

Abic’s figures were disclosed yesterday in the presence of the Brazilian minister of Agriculture, Reinhold Stephanes. Statistical projections from the Association show that consumption should grow by approximately 5% this year, against a global average of 1.5%.Rio de Janeiro capital of coffee Under the motto “Café Também É Saúde” (“Coffee is also Healthy”), the Brazilian government is launching a promotional campaign on coffee and health which aims at making of Rio de Janeiro the “capital of coffee” during the Pan-American Games. The major south-eastern city of

Brazil will host the games from July 13 through 29. Stephanes complained about the excessive appreciation of the real against the dollar which is cutting the profits of agricultural exporters. “The one thing I do not like is when the dollar depreciates too much, because the effects are unfavourable to the sectors that we defend. Now, if we export over US$ 50 billion in agricultural products, and import just US$ 6 billion, then what can we do? This generates a surplus, more dollars come into the country, and the price falls,” he said.(source: Anba)

[tags]coffee consumption, coffee production, Pan AM Games, capital of coffee, coffee campaign, coffee, coffee prices [/tags]