Coffee. World Markets and Trade. Jun 2014 June 26, 2014
2014/15 Forecast Overview
World coffee production for 2014/15 is forecast to decline 1.5 million bags from the previous year to 148.7 million due primarily to a weather related shortfall in Brazil. However, the reduction is expected to be partially offset by rebounding production in Colombia and Central America. Global bean exports and consumption are forecast at record levels, drawing inventories down.
Brazil’s Arabica output is forecast to drop a second consecutive year to 33.1 million bags, breaking the biennial cycle for the first time in over two decades with a harvest 21 percent lower than the last “on-year”. Prolonged drought as well as high temperatures in Minas Gerais and Sao Paulo (about 80 percent of Arabica production) adversely affected the filling and development of beans. Also, Parana’s Arabica output is forecast 800,000 bags lower following extensive tree removal due to last year’s frost damage. The Robusta harvest is forecast at a record 16.4 million bags as output rebounds 2.1 million from last year’s weather related shortfall in Espirito Santo, where the vast majority is grown. The combined Arabica and Robusta harvest is forecast at 49.5 million bags, down 4.2 million from last year. Lower available supplies are expected to drop ending stocks to 6.3 million bags and reduce green bean exports to 29.0 million.Consumption remains flat after two decades of steady expansion.
Vietnam’s production is forecast at a record 29.3 million bags, up 1 percent as record harvested area more than offsets reduced yields from tree renovation. The rainy season began in mid-April and good flowering and cherry development is anticipated. Over the last five years, farmers increased area 20 percent and yield 30 percent in response to rising prices. Bean exports are forecast 2.0 million bags higher to a record 27.0 million, reversing the recent inventory buildup.
Colombia’s production is forecast up 1.0 million bags to 12.0 million on higher yields. Continued growth is expected following 7 years of below-average output due to the spread of coffee rust and coffee cherry borer insect. The rust initially affected as much as 40 percent of the planted area, but has since declined to less than 10 percent following an aggressive tree renovation program. Colombia is expected to rely on imported beans from Ecuador and Peru for just one-third of consumption, down from nearly 85 percent a few years ago. Bean exports are forecast to gain 300,000 bags to 10.5 million on increased shipments to the United States and Europe.
Central America and Mexico account for one-fifth of the world’s Arabica production. After two years of declining output caused by coffee rust, the region is forecast to increase 870,000 bags to 16.2 million. Honduras is expected to add 400,000 bags to 5.0 million as rust-resistant trees from recently renovated land reach maturity. Guatemala is forecast to rebound 200,000 bags to 3.6 million on improving yields. El Salvador, where production plunged 60 percent last year, is forecast to rebound 175,000 bags to 675,000 as more growers implement control measures. Bean exports are forecast to gain 750,000 bags to 13.0 million as a result of more exportable supplies. Approximately 40 percent of the region’s exports are destined for the United States, followed by 35 percent to the European Union.
Indonesia’s production is forecast to drop 600,000 bags to 8.9 million. For the second consecutive year, excessive rain during cherry development lowered yields. Coffee area has stabilized, but is down from its recent peak due to substitution with higher priced commodities. Bean exports are forecast to decline 600,000 bags to 5.4 million on less available supplies.
India’s production is forecast to add 100,000 bags to 5.1 million on higher Robusta output in Karnataka, the largest coffee producing State. Arabica is forecast modestly lower as it enters the off-year of the biennial production cycle. Bean exports are forecast unchanged at 3.7 million.
The European Union accounts for nearly half of the world’s bean imports and is forecast to increase 500,000 bags to a record 46.0 million. Top suppliers include Brazil (29 percent), Vietnam (24 percent) and Indonesia (6 percent). Ending stocks are forecast to remain at 10.5 million bags after trending lower over the last decade.
The United States imports the second-largest amount of coffee beans and is forecast to increase slightly to a record 25.0 million bags as consumption continues to rise. Top suppliers include Brazil (25 percent), Vietnam (18 percent) and Colombia (13 percent). Ending stocks are forecast unchanged at 5.7 million bags.
World production is revised down from the December estimate by 400,000 bags to 150.1 million.
• Central America and Mexico combined are revised down 1.6 million bags to 15.3 million due to coffee rust.
• Colombia is raised 1.0 million bags to 11.0 million as yields rebound from coffee rust and coffee cherry borer.
• Brazil is 600,000 bags higher to 53.7 million primarily on increased Robusta yield in Espirito Santo.
• Vietnam is up 500,000 bags to 29.0 million on higher-than-anticipated yield.
World bean exports are raised 1.5 million bags to 104.3 million.
• Brazil is revised up 2.5 million bags to 30.0 million on strong U.S. and European demand.
• Colombia is revised up 1.2 million bags to 10.2 million due to higher exportable supplies.
• Central America and Mexico combined are revised down 2.1 million bags to 12.3 million due to lower exportable supplies.
World ending stocks are lowered 600,000 bags to 35.8 million.
• European Union is reduced 1.0 million bags to 10.5 million on higher-than anticipated consumption.
• Vietnam is down 700,000 bags to 3.2 million on stronger exports.
• Brazil is 1.3 million bags higher to 9.3 million bags due to additional output and reduced consumption