The world of coffee is in crisis with over 70 percent of the land cultivated with coffee worldwide currently being in a state of partial or complete abandonment because of close to two decades of predominantly low prices. The Uncomfortable Truth for the coffee market is that as much as the market tries to ignore the failure of growing countries to revive output in ailing farms, production has for the past 25 years remained stagnated! Yes, you read correctly — despite the many reports written by and attributed by market-indoctrinated reporters and trade-sponsored analysts, the coffee market does NOT have access to “abundant supply” and stocks in importing countries — the only stocks the trade can measure in some certifiable way — are at 6-year-lows. The figures speak for themselves — please do read on for full details, because we are not trying to make up figures for convenient arguments. SpillingTheBeans owner and author, Global Coffee Writer and Independent Commodity Analysts Maja Wallengren, has today arrived in the Colombian town of Medellin which in the next three days will host the 1st ever World Coffee Producers Forum, organized by the National Coffee Growers Federation of Colombia. Stay tuned for news from the forum over the next few days, and read on for the SHOCKING figures of a 25-year-low for Arabica production in Latin America where, with the sole exemption of Brazil, supply today is below the levels seen in 1991-92.
JULY 10, 2017 (SpillingTheBeans)–-At the beginning of 2017 the coffee trade was all excited that Honduras, Central America’s largest grower and exporter, was making a strong come-back from what had been a temporary set-back in the Honduran expansion plans that followed the rust crisis. But overall production in the region and the lack of recovery in overall numbers remains a concern to roasters and traders in the market.
“After several weak years Central American production is expected to tick up in the year to September 2017, due almost entirely to higher production in Honduras. Central America has suffered from widespread leaf rust problems, and Central American production is only 79% of what it was five years ago,” said John Abbink, analyst for the online investment forum fronteranews.com, in a blog post published last December. A review of production statistics from both the USDA, the ICO and independent German statistician F. O. Licht confirm that world coffee production, with only a handful of exemptions including Honduras, has stagnated not just since before the rust crisis, but all the way back to the 1990-91 crop cycle.
A stunning 25 years of consecutive decline from poor husbandry, low prices and aging trees have only been offset by new production from Brazil, Vietnam, Honduras, Tanzania and Ethiopia. Peru, which also saw production booming in the years up to the rust outbreak, has seen rust taking production back to the levels recorded in the late 1990s. And Colombia, while it has made a solid recovery from the production crisis that started there in 2008, is still well behind the figures of production between 14.3 and 17.8 million bags seen from Colombia between 1990 and 1993, ICO-data reveal.
Overall the key Latin American Arabica producers of Mexico, Central America, Peru and Colombia are projected to produce 32.925 million bags in the current 2016-17 harvest cycle, only a tad up from production in the last 2015-16 crop of 32.55 million bags. This is below production not only in the 1999-2000 record cycle for the region where this group of countries produced 33.3 million bags, but even further below production in the 1991-92 cycle of 35.226 million bags. Increasing the severity of the supply situation, production in 1991-92 was measured against world consumption of 79 million bags while global demand today has soared to a stunning 154-156 million bags.