futures fell back below 200 cents a pound after Volcafe turned less gloomy on
Brazilian coffee output, lifting expectations for production in Colombia and
analysis group, part of the ED&F Man commodity trading empire, lifted by
2.5m bags to 142.7m bags its forecast for world coffee production in 2014-15.
The upgrade reflected
an increase to 47.0m bags in the estimate for output from Brazil, the top
producing country – a figure 1.1m tonnes higher than previously expected, if
still a drop of 10.2m bags year on year thanks to prolonged dry weather in the
country's coffee belt.
yields have confirmed our initial worries, and the Arabica crop, at 29.5m bags,
is set to be the lowest since 2007," Volcafe said.
However, yields in
Minas Gerais, Brazil's top coffee-producing state, almost all of arabica beans,
had proven "better than expected", with the estimate for output of
conillon, a robusta type grown mainly in Espirito Santo, upgraded too.
Volcafe figure, while well below market estimates approaching 60m bags common
before drought hit late in 2013, is towards the higher end of the range of
Conab, the official
Brazilian crop bureau, forecasts production of 44.5m bags, and ProCafe of some
41.7m bags, although CoffeeNetwork, part of INTL FCStone, two weeks ago stuck
by an estimate of 50m bags.
highlighted the potential for the after-effects of the drought to reduce
Brazil's coffee production potential in 2015 too, given that next year's
cherries will be carried on vegetation grown this year, but which has been
stunted by lack of rain.
"While it is
too early to attempt a 2015 forecast, it is clear that the condition of the
coffee trees in Brazil just ahead of the main flowering is poor," Volcafe
"It is the
possibility of a further deficit in 2015-16 that keeps prices elevated and the
market on edge."
Volcafe also lifted
its forecast for coffee output in 2014-15 in Vietnam - the second-ranked
producing country, but mainly a grower of robusta beans – by 500,000 bags to
28.5m bags, if remaining below last seasons' record 30.0m-bag crop.
substitution to pepper production, as well as a frost in the north, has been
negative for output in the coming season, good robusta prices have by and large
supported input use and renovation," the group said.
And the estimate
for Colombian production was lifted by 1.0m bags to 12.0m bags, reflecting the
boost to output from a replanting programme which started late in the last
at 8.8m bags the shortfall in world output behind consumption in 2014-15, below
a previous estimate of 11.3m bags, and following two seasons of production
surplus totalling nearly 15m bags.
Arabica coffee for
December stood 1.6% lower at 199.05 cents a pound in New York at 10:45 local
time (15:45 UK time).
Robusta coffee for
November was 0.2% lower at $2,087 a tonne in London.