Bloomberg News

Brazil Coffee Growers’ Inventories Are Lowest in a Decade

January 23, 2012

Jan. 20 (Bloomberg) -- Coffee inventories are set to fall to the lowest level in a decade for growers in Brazil, the world’s largest producer, which should keep prices above $2 a pound, the head of Brazil’s national coffee council said.

Coffee stocks at Brazilian cooperatives should drop at least 26 percent to below 2.58 million bags, the lowest since 2002, said Silas Brasileiro, president of CNC, as the council is known. Last year’s inventory was 3.5 million bags.

Production in Brazil, the world’s largest exporter, will climb to between 49 million and 52.3 million bags this year, from last year’s 43.5 million, the country’s crop-forecasting agency Conab said Jan. 10. That would exceed a 2002 record of 48.5 million bags.

“Even Brazil’s record crop will not weigh that much on prices due to low inventories,” Brasileiro said Jan. 17 in a telephone interview from Brasilia. “Inventories are very low because demand has been strong and weather hasn’t helped producing countries like Colombia.”

CNC will release its latest coffee stocks report in February, he said. Coffee production in Colombia, the world’s second-largest supplier of arabica beans after Brazil, shrank to a 35-year low in 2011, the country’s national federation of coffee growers said Jan. 17.

Arabica coffee for March rose 0.02 percent to $2.2670 a pound at 8:14 a.m. on ICE Futures U.S. New York. Prices have fallen 2.3 percent in the past year.

Global consumption should rise 1.5 percent this year, Roberio Silva, executive director of the International Coffee Organization said Jan. 18. Consumption growth should be driven by Eastern European countries, China, Russia and Brazil, Brasileiro said.

--Editors: Robin Saponar, Dale Crofts

To contact the reporter on this story: Lucia Kassai in Sao Paulo at lkassai@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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