Rabobank Sees Coffee Surplus of 5.3 Million Bags in 2012-13
Coffee supplies may outpace demand in the season that starts in October in most countries, reversing the current shortage, according to Rabobank International.
Coffee production will be 5.3 million bags higher than consumption in 2012-13, up from a deficit of 2.7 million bags in 2011-12, the bank said in a monthly report e-mailed today. Production will climb 7.7 percent to 146.2 million bags as arabica trees in top grower Brazil enter the higher-yielding half of a two-year cycle, Rabobank estimates. Global consumption will rise to 141 million bags, an increase of about 2 percent.
“The coffee market shifts generally between surplus and deficit depending on the production cycle of Brazilian output,” Keith Flury, an analyst at the bank in London, wrote in the report. “The increase in production has also been supported by the high coffee price.”
Brazil will produce 38.5 million bags of arabica beans in the 2012-13 season that starts there in July and 17 million bags of the robusta variety, according to the bank. Colombia, the second-biggest grower of arabica coffee, will produce 9 million bags in the 2012-13 season, up from 7.2 million bags in 2011-12, the bank estimates. Growers in Vietnam, the biggest robusta producer, will harvest 23.5 million bags in 2012-13, up from 22.5 million bags in the current season, Flury said.
“While expectations of better supply have resulted in lower prices, the new season harvests will not be able to build buffer stocks high enough for the next deficit year of 2013-14,” Flury said in the report. “Demand growth, especially in robusta and the washed and semi-washed arabicas, will prevent international prices from collapsing.”
Coffee Seen Rising
Robusta coffee will average $2,050 a metric ton in London in the second quarter, up from last month’s forecast of $1,950 a ton. Prices will rise to $2,100 a ton in the third, up from the previous estimate of $1,850. The commodity will trade at $2,000 a ton in the final three months, up from $1,800.
“Certified Liffe stocks continue to fall and exports from Vietnam are tailing off, supporting the market expectation that robusta supplies are thin in Europe and the U.S. relative to demand ahead of the next Vietnamese harvest,” Flury said.
To contact the reporter on this story: Isis Almeida in London at email@example.com