Bloomberg News

2011-12 Coffee Output Seen at 128.5 Million Bags, ICO Says

March 01, 2012

Global coffee output will be 128.5 million bags in the season started in October, down from the previous forecast of 130.9 million bags, according to the London-based International Coffee Organization.

Production in Vietnam, the biggest grower of the robusta variety, will be 17.5 million bags, one million fewer than estimated in January’s report, ICO data show. Output in Uganda, Africa’s second-largest producer, will fall to 2.85 million bags from a previous forecast of 3.3 million bags. Farmers in India will harvest 4.9 million bags, down from 5.4 million bags.

“A slight decrease of 3.7 percent is forecast in Asia and Oceania, down to 34.7 million bags,” the ICO said in the February report e-mailed today. “This reduction in production is due to Vietnam and India where heavy rains are likely to affect their output.”

Global production will drop from 134.3 million bags in the 2010-11 season as arabica trees entered the lower-yielding half of a two-year cycle in Brazil, the biggest grower. Output in Central America will also fall because of rains.

Beginning stocks in exporting countries for the 2011-12 season stood at 17.4 million bags, the lowest on record, the ICO said. High prices encouraged exports, it said. Inventories in importing countries were at 22.3 million bags, a “healthy level.”

Coffee consumption was 135 million bags in 2010 and is set to increase in 2011, the ICO said, without providing figures for last year. Prices climbed to a 14-year high of $3.089 a pound in May last year.

Arabicas

“Strong and dynamic demand, coupled with the short supply of washed arabicas, should support firm prices going forward,” according to the report.

Robusta coffee is grown mainly in Asia and parts of Africa and used to make instant drinks and espresso. Arabica beans are grown mainly in Latin America and favored by companies like Starbucks Corp. (SBUX) for specialty drinks.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net


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