Volcafe Raises Estimate for Global Coffee Deficit on Vietnam

Volcafe Ltd. increased its forecast for a global shortfall in coffee, citing disease among trees in Vietnam and poor weather that hurt robusta supplies.

Supply will trail demand by 9.9 million bags in the 12 months that started Oct. 1, according to an e-mailed report today from Volcafe, a unit of commodities trader ED&F Man Holdings Ltd. That compares with a surplus in the previous year of 7.4 million bags, which are 60 kilograms (132-pounds) each.

In Vietnam, “tree fatigue, as well as increased incidence of disease will reduce yields this year,” Winterthur, Switzerland-based Volcafe said. “Variable weather during the development of this season’s crop has also led to some quality concerns.”

The global robusta deficit will probably be 3 million bags, the largest since 2006, Volcafe said, compared with a previous estimate of 1.9 million bags from September. Last season, there was a surplus of 2 million. Vietnam is the biggest producer of robusta.

For arabica, the global shortfall is forecast at 6.9 million bags, Volcafe said. Brazil’s deficit of the variety was reduced to 6.2 million bags, from 6.9 million bags forecast in September, the company said, citing lower demand.

The shortfall in the Brazilian arabica supply will be offset by surpluses in the previous two seasons of 11 million bags, Volcafe said.

“There remains sufficient Brazilian arabica to meet demand needs in 14/15,” according to the report. “Globally new demand will be a function of robusta.”

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