With the year 2013 begining, two points deserve attention in world coffee production. The first is the sudden and sharp drop in prices, which are pressed by factors different than the scenario indicates fundamental, and the second is the difficulty experienced in coffee plantations of Central America - almost as a whole - due to bad weather, lack of investment and especially the attack of the fungus roya, which causes rust. The most recent reports indicate that the main producing countries of the continent should suffer losses of 5% to 40% in the coffee crop only in consequence of rust incidence.
On the other hand, Mexico, whose initial forecasts pointed to a growth of 20% in the harvest 2012/13, is now reviewing its forecasts also due to rust. According to reports from international agencies, Rodolfo Trampe, president of the Mexican Association of Coffee Production (Amacafe), pointed out that an unusual and aggressive contamination of the fungus roya in the coffee plantations of Chiapas is threatening to reduce current country production. He said the crop had the potential to grow to 20% in this cycle, but the outbreak threatens this progress. Mexico harvested 4.3 million bags in 2011/12.
Nevertheless, even the International Coffee Organization (ICO), in its Market Report for December 2012, decreased by 1.3% its estimate of world production cycle in 2012/13 to 144.1 million bags. According to the organization, the revision was due to the fact that some countries of Central America have been affected by adverse weather, pests and diseases. Furthermore, the ICO added that reports of rust in several Central American countries could further shorten this projection, using the same alert for the case of occurrence of the drill.
This worrying scenario about the health of Central American coffee farms becomes even more serious when we observe the behaviour of prices. With prices at levels that virtually equal to production costs, there is no way for the coffee producer to invest in combat or control of rust or any other pests and diseases that may relate to crops. If the market does not react, we do the warning that the balance between supply and demand worldwide may be lost and we could notice a shortage of the product in the short and medium term.
Source: Revista Cafeicultura