Carryover coffee stockpiles owned by private companies in Brazil, the world’s largest producer of the beans, totaled 33.95 million bags on Jan. 1, according to Santos, Brazil-based exporter Comexim Ltda.
The country’s government also held another 1.63 million bags, bringing the total carryover inventories in the period to 35.6 million bags, the company said in a report e-mailed today. Private stockpiles were 3.77 million bags in July, while the government held the same amount, according to the report. A bag of coffee weighs 60 kilograms (132 pounds).
“There is lot of coffee in Brazil,” John Wolthers, a coffee trader at Comexim, said by phone from Santos today. “The carryover is one of the biggest I’ve seen in a long time.”
Brazil shipped and consumed most of the coffee it produced for many years, Comexim said. Reduced exports, a delayed harvest and an increase in the use of robusta beans by roasters at the expense of arabica coffee contributed to the rise in the country’s carryover stockpiles, according to the report.
Coffee exports from Brazil fell 16 percent to 28.3 million bags last year, according to Cecafe, Brazil’s coffee exporters’ council. Arabica coffee has lost as much as 6 percent of demand to robusta since 2011-12 as roasters turned to the cheaper beans, Macquarie Group Ltd. (MQG) estimated in a report yesterday.
Farmers in Brazil will harvest 55.8 million bags in the 2012-13 season, according to Comexim. The carryover stockpiles indicate producers still have a lot to sell, Wolthers said. Arabica coffee traded on ICE Futures U.S. in New York declined 37 percent last year, making it the worst performer in the Standard & Poor’s gauge of 24 raw materials. Lower prices have prompted producers in Brazil to hold back beans.
“As time goes by, producers will see the new crop starting and at some point they will have to start selling,” Wolthers said, adding that buyers were also waiting for prices to fall.
The next coffee crop in Brazil will be a record for a year in which trees enter the lower-yielding half of the two-year cycle, Comexim said, without providing a figure.
“We are having abundant rainfall in the coffee districts and this will only be very positive for this 2013-14 crop, which will be the biggest Brazilian off-crop ever,” Comexim said.
Arabica coffee for March delivery was 0.7 percent higher at $1.5665 a pound by 12:44 p.m. in New York.
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