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C America to lose further coffee to rust outbreak

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Coffee growers in Central America will continue to pay a heavy toll to the outbreak of coffee rust in 2014-15, to judge by forecasts for output from El Salvador, Mexico and Costa Rica, where production will fall to a 38-year low.

Mexico, where the outbreak of the virulent fungus proved relatively mild, will see some recovery in output, thanks to government-backed efforts to control the disease, which causes defoliation, leading to yield declines and, in extreme cases, the loss of trees.

But the revival will be limited to 100,000 bags, taking output to 3.90m bags, US Department of Agriculture foreign staff said in their first forecast for the harvest.

That will be, excluding the 2013-14 harvest, the weakest in 34 years.

"Coffee production in Mexico has been affected by adverse weather conditions – frosts, untimely rainfall, excess humidity—which have been ideal for the expansion of coffee rust in many production areas," the USDA staff said.

'Possibility of a drought'

In El Salvador, although output will rebound by 168,000 bags, that is from a 2013-14 figure which USDA staff downgrade to 507,000 bags – the lowest in 80 years.

And an increase is only expected largely because 2014-15 will be an "on" year for production in the country which, like top coffee producer Brazil, sees alternate higher and lower years of coffee output.

The forecast also makes no allowance for poor weather stemming from the El Nino weather pattern which meteorologists see as likely this year - with those in Australia this week rating the chances at more than 70% - and which is linked to dryness in many parts of Latin America.

"This [output] number could be lower since there is a possibility of a drought due to the El Niño weather pattern and also a new coffee leaf rust attack during the upcoming production cycle," USDA staff said.

'Cause for concern'

In Costa Rica, production is not expected to recover at all, forecasting dropping a further 48,000 bags to 1.38m bags, which would be the lowest since 1976-77.

The country has, like last year, seen a long dry season followed by a relatively late and mild rainy season which, besides limiting the moisture needed to transport fertilizer into trees, may affect flowering and fruit formation – as in 2013.

This weather "is a cause for concern among producers", the USDA staff said.

They added that rust "has not been overcome yet in some areas of the country" and, indeed, Icafe, the Costa Rica Coffee Institute, has warned that the weather conditions are favourable for the continued spread of the disease.

Export prospects

The forecasts come at a time when market focus continues to centre primarily on Brazil, which suffered extreme drought early in the year - the impact of which investors are waiting to assess, with harvesting still in its preliminary stages.

However, Central America is being watched with considerable interest too, to assess how significantly its producers may be able to revive output to help fill the void in supplies left by Brazil.

On estimates from USDA attaches, El Salvador's coffee exports for 2013-14 will fall 74% to a historic low (ie since at least the 1950s) of 417,000 bags, while Costa Rica's will drop in 2014-15 to a 39-year low of 1.14m bags.

Both countries on average have historically exported roughly 1.4m bags of coffee a year.


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