The high Brazilian coffee production this crop year is unlikely to impact the market, for the demand remains strong, said International Coffee Organisation (ICO). In its latest monthly coffee market report, ICO said, “Although there is likely to be a significant increase in Brazilian production this crop year, this will not necessarily lead to a serious imbalance in the market since demand remains strong.”
“Moreover, any encouragement to increase production is limited in many countries by the high costs involved and the spread of coffee disease,” it added. According to CONAB, the official agency, total production will be 50.6 million bags, of which arabica is 37.7 million bags and 12.9 million bags of robusta.
In Colombia, heavy rainfall following a prolonged drought has triggered the spread of coffee berry borer and coffee leaf rust. This is bound to have a negative impact on the level of Colombian coffee production in crop year 2011-12. In Indonesia, however, heavy rainfall on the eve of harvesting could be disruptive.
Record Exports
ICO said on the basis of the latest data received from member countries, total production in crop year 2011-12 is estimated at around 130.9 million bags compared with 134.2 million bags in 2010-11, a fall of 2.4 per cent.
The high prices seen in 2011 have encouraged exports, leading to a reduction of stocks in many exporting countries. This level of total exports is the highest ever recorded and shipments by all exporting countries in December 2011 totalled 9.1 million bags, bringing the cumulative total of exports during calendar year 2011 to 103.7 million bags compared with 96.9 million bags in 2010, an increase of 7 per cent.
Prices
Prices of the three arabica groups remained relatively firm in January, while those of robustas fell slightly. The monthly average of the ICO composite indicator price was 188.90 US cents/lb compared to 189.02 in December 2011, a slight drop of 0.1 per cent.