March 26 (Bloomberg) -- Coffee stockpiles may fall to “critical” levels before the start of the next harvest in Brazil, the world’s largest coffee grower, according to the country’s National Coffee Council.
Coffee inventories in exporting countries were 17.4 million bags at the start of the 2011-12 season, the lowest on record, the London-based International Coffee Organization estimated in its February report. Stockpiles of importing nations were 22.3 million bags, it said. Brazil’s harvest usually starts in July.
“Coffee stockpiles in Brazil and in importing countries continue to fall and may reach critical levels at the end of the inter-harvest period,” Silas Brasileiro, president of the council, known as CNC, wrote in a report e-mailed on March 23.
Growers in Brazil will harvest a record 49 million to 52.3 million bags in the 2012-13 season as trees enter the higher-yielding half of a two-year cycle, the government estimates.
Arabica coffee prices have fallen 21 percent this year as traders sold the beans in anticipation of Brazil’s record crop.
“We continue to advise producers to be careful when selling at this moment of low market prices, waiting for better opportunities which should arise by the end of the inter-harvest period,” Brasileiro wrote in the report.
The next coffee crop in Brazil will only be enough to supply local and export demand, and won’t generate excess supplies for inventories to carry into the 2013-14 season, Santos, Brazil-based broker Escritorio Carvalhaes said in a report e-mailed March 23.
Arabica coffee is grown mainly in Latin America and is favored by Starbucks Corp., the world’s biggest coffee-shop chain.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.