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La Nina rains wash out Indonesia coffee hopes

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Indonesia is to return to Colombia third ranking in the league of world coffee producers, thanks to crop-damaging rains blamed on the disruptive La Nina weather pattern, which looks set to run well into next year.

The US Department of Agriculture bureau in Jakarta ditched forecasts of a rise to 9.6m tonnes in Indonesia's coffee production in 2010-11 after "higher and more intensive rainfall throughout Indonesia's coffee-growing areas".

"The increased levels of rainfall impact production yields as well as producers' ability to dry the beans after harvest," the bureau said in a report.

The rainy conditions - which have also hampered production of palm oil, helping prices of the vegetable hit a two year high - had furthermore raised infestations of the coffee bean borer beetle which, unusually, affected arabica crops as well as the robusta fruits it usually feeds on.

Colombia vs Indonesia

The bureau cut to 8.1m tonnes its forecast of Indonesia's total coffee output, representing a decline of 14.9% year on year, and with reductions to estimates for both the robusta harvest, the country's historically favoured variety, and production of the higher-value arabica beans which the government is attempting to encourage.

At that level, Indonesia's coffee output will fall behind that of Colombia, which a separate USDA attaché report pegged for 2010-11 at 9.0m tonnes, in line with existing USDA forecasts.

Colombia's output too has been dogged by poor weather, which remains a "wild card" and the spread of the coffee rust fungus to an estimated 15% of trees.

However, the harvest in the South American country is expected to show longer-term recovery thanks to a replanting programme, which is seeing the first new trees come into production.

More La Nina to come

The reports came as official weather forecasters in Australia said that the La Nina weather pattern, blamed for flooding in South East Asia and dry conditions in South America, was likely to "persist through the southern hemisphere summer and into the first quarter of 2011".

While the cooler-than-normal surface water temperatures of the Pacific, typically associated with a La Nina, had begun to warm, those further down were "up to 4 degrees Celsius cooler than normal", Australia's Bureau of Meteorology said.

"La Nina conditions have weakened slightly but remain firm across the tropical Pacific."

The South American dryness typically associated with Las Ninas is also proving a concern in corn and soybean markets, both crops of which the region is a big producer.

Farming areas in Argentina, Paraguay and southern Brazil have since October 1 received less than half of their usual rainfall, T-Storm Weather said.

In Australia, persistent rains have hampered sugar cane harvesting and are raising concerns about grain quality, if having put the east of the country on track for bumper tonnage.

By Agrimoney.com

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