MAY 14 (SpillingTheBeans)–Coffee exports from Brazil, the world’s largest producing country, are expected to drop sharply throughout the next year starting in the coming months, the International Coffee Organization said in its latest market report for April.
The ICO also said Brazilian exporters had bought heavily into existing stocks in order to keep up with demand for cheap exports, but this will have severe percussions for the next year as another small harvest will be unable to repeat the record export volume recorded in the 2014-15 crop cycle.
The official Brazil Supply Agency, Conab, meanwhile has maintained its estimate of the new 2015-16 crop — for which harvesting has started in the last few weeks — to produce as little as 44.1 million bags, hence generating a FRESH supply deficit in the global market of at least 6 or 7 million 60-kilogram bags alone from the shortage of beans from Brazil.
“Coffee exports from Brazil reached a record high of 36.8 million bags in crop year 2014/15 (April to March), fuelled by domestic stocks and encouraged by a depreciation in the exchange rate. Production in crop year 2015/16 is currently estimated by Conab as roughly unchanged at between 44.1 and 46.6 million bags,” said the ICO.
“However, with Brazil’s domestic consumption at around 21 million bags, export availability is going to be significantly reduced over the next year,” it added.
Stay tuned for more detailed analysis on the latest coffee market fundamentals, coming up next on Spilling The Beans.
For SpillingTheBeans’ full 2014-15 coffee market outlook and forecast for the coffee year ahead, see: http://spilling-the-beans.net/video-the-world-is-running-out-of-coffee-market-insight-live-from-coteca-in-hamburg/
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