Indonesia Coffee Output to Rise 38% in 2012-13, Volcafe Says

Coffee production in Indonesia, the world’s third-largest producer of the robusta variety, will jump 38 percent in the season starting in April, according to Volcafe, the coffee unit of ED&F Man Holdings Ltd.

Production will total 9.1 million bags in 2012-13, up from 6.6 million bags in the current season, the Winterthur, Switzerland-based trader estimated in a quarterly report e- mailed today. Rains caused by the La Nina weather pattern, associated with cooler-than-normal equatorial waters in the Pacific Ocean, cut output in the current season.

A larger crop in Indonesia may help ease tight supplies that have lifted prices for robusta coffee by 11 percent in London this year. The variety is grown mainly in Asia and parts of Africa and used to make instant coffee and espresso.

“It is very tight until April, and then once the new Indonesian crop arrives, there will be a reversal of this tightness and a rebuilding of stocks,” Volcafe said.

Vietnam, the biggest robusta producer, will harvest 22.1 million bags in the 2011-12 season started in October, up from 20 million in the previous season, the trader estimates.

“Vietnam is almost the lone supplier of volume robusta these last couple of months, until India, Uganda, Indonesia, Ivory Coast or even Brazil start to ship more volume come April and May,” Volcafe said in the report.

Honduras, Colombia

Coffee output in Honduras, Central America’s largest producer, will advance 21 percent to 5.1 million bags in 2011-12 as yields improve, Volcafe said. The season there started in October. Production in Colombia, the second-biggest producer of the arabica variety, will “struggle to reach” 7 million bags in 2011-12. Output will be no higher than 7.5 million bags in 2012-13, it said.

Arabica beans are grown mainly in Latin America and favored by companies such as Starbucks Corp. (SBUX) for specialty beverages.

Farmers in Brazil, the world’s biggest coffee grower, will harvest 55.7 million bags in 2012-13, up from 48 million bags in 2011-12, as trees enter the higher-yielding half of a two-year cycle, according to Volcafe. Output in the last high-yielding season in 2010-11 was 57.6 million bags. Harvesting there usually starts in July.

“We have estimated that there is still more coffee stored internally than we originally expected, and so have revised up our Brazil 2011-12 crop number by 1 million to 48 million bags,” Volcafe said. “Rainfall for the new crop has been a touch patchy through February so far.”

Global coffee demand will outpace supplies by 7 million bags in 2011-12, the trader estimates. The market may move into a surplus of 2 million bags in 2012-13, according to Volcafe. A bag of the beans weighs 60 kilograms (132 pounds).

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net

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