Global coffee market will have deficit of 800 million bags in 2014/2015

The global coffee market will be in deficit of 800.000 60kg bags in the 2014/2015 season, by crop losses from drought in the Arabian world's largest producer, Brazil, and problems caused by fungal disease in Central America, said an official of the International Coffee Organization (ICO).
Nevertheless, the world has enough to meet the projected consumption of 146 million bags stocks, said on Friday (7/11) to Reuters the CEO of ICO, the Brazilian Roberio Oliveira Silva, during a conference in Ethiopia.
Still, the projection - the first time that the ICO has put a number on the expected deficit - will reinforce concern that damage from drought in Brazil leading to a smaller crop in the country in 2015/2016.
It would be the first global shortfall in global coffee market in five years. Roberio Silva said that the demand for Arabica from Brazil in 2015/2016 will exceed supply by 3 million bags. This is a significant portion of annual exports projected at 32.5 million bags. He said that despite the lack of government estimates, believes the Brazilian Arabica production will be significantly affected next season.
"My perception of it being a Brazilian and talking to many people in Brazil without having a government estimate is that we will have problems next year in terms of harvest," said Roberio Silva.
"The main issue remains the potential of the next crop in Brazil, to 2015/2016," said Roberio Silva. "The harvest of Arabica will suffer."
Problems in Brazil crop, along with the damage from rust, a fungal disease known as roya in Central America, boosted prices of Arabica coffee on ICE Futures this year to maximum of two and half years of $ 2.2910 per lb, although since then they have fallen to $ 1.8640.
Roberio Silva added that arbitration between Arabica and Robusta coffee, cheaper and of lower quality, doubled in the past six months, causing a shift in demand toward the Robusta.
Source: Café Point