Colombia's Coffee Production to Be at Low End of Estimates Amid Scarcity

Colombian coffee production will fall to the lower end of forecasts this year amid “scarcity” that has buoyed prices, the head of the nation’s growers federation said.

Growers will harvest between 10 million and 10.5 million bags, Luis Genaro, chief executive officer of Colombia’s National Federation of Coffee Growers, said today in Bogota. The group last month forecast a crop of between 10 million and 11 million bags.

Coffee has rallied 19 percent this year and may maintain gains after global stockpiles fell to the lowest level in years and consumption grew, Genaro said. A premium paid for Colombian arabica beans over New York futures also may hold, he said. The differential is 66.95 cents, according to Bloomberg data.

“There has been relative scarcity of Colombian beans and relative scarcity of mild coffee worldwide,” he said.

Colombian growers have “zero” inventories of coffee, he said. Production in the first six months of the year shrank to 4.04 million bags from 4.24 million bags a year earlier. Each bag weighs 60 kilograms (132 pounds).

Growers aim to produce 14 million bags in 2015 by replacing older plants, according to Genaro.

Arabica coffee for September delivery gained 4.4 cents, or 2.8 percent, to $1.617 a pound on ICE Futures U.S. in New York.

To contact the reporter on this story: Heather Walsh in Bogota at hlwalsh@bloomberg.net

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