Possibly Bitter Coffee Next Year
World Coffee output will go down watching poor production forecasts for giants like Brazil and Asian giants like Vietnam may also remain low on production with India to remain just 150 thousand ‘60 kilograms bag’ more by December 2017-18.
World coffee production for 2017/18 is forecast 600,000 bags lower than the previous year to 159.9 million bags (60 kilograms) as lower output in Brazil more than offsets record production in Vietnam. With global consumption forecast at a record 158.5 million bags, ending inventories are expected to drop sharply to a 5-year low of 29.3 million bags. World exports are expected to slip primarily due to lower shipments from Brazil.
Major Producing regions
Brazil’s Arabica output is forecast to drop 6.8 million bags to 38.8 million. Production is expected to drop compared to the previous season since a majority of trees are in the off-year of the biennial production cycle. Also, coffee beans are smaller-than-anticipated in many areas of Minas Gerais and Sao Paulo. Robusta production, however, is expected to rebound by 1.9 million bags to 12.4 million. Last year’s output plummeted to a 7-year low due to above-average temperatures and a prolonged dry spell in Espirito Santo, where a majority is grown. The combined Arabica and Robusta harvest is forecast down 4.9 million bags to 51.2 million. With consumption expected to continue rising to a record 22.2 million bags, ending stocks are forecast to drop by one-third to just 2.6 million bags. Exports are forecast to continue sliding to a 5-year low.
An Asian giant
Vietnam’s production is forecast to rebound by 3.2 million bags to a record 29.9 million as ideal weather led to good flowering and fruit-set. Also, farmers benefited from the previous year’s higher prices, allowing them to increase expenditures for fertilizers and other inputs to raise yields. Cultivated area is forecast nearly equal to last year, with over 95 percent of total output remaining as Robusta. As a result of higher available supplies, exports and domestic consumption are expected to rise.
Central America and Mexico are forecast to add 600,000 bags of production to reach 19.4 million, though some countries in the region continue to struggle with the coffee rust outbreak that first lowered output 5 years ago. Production has recovered in Costa Rica, Honduras, and Nicaragua during this period but remains depressed in El Salvador, Guatemala, and Mexico due to the effects of coffee rust. Bean exports for the region are forecast nearly flat at 16.2 million bags. Approximately 40 percent of the region’s exports are destined for the United States, followed by 35 percent to the European Union.
India’s Estimations
India’s overall production of Standard Arabic coffee of 60 Kg bags (in thousands) till June 2017-18 (5450 thousand) and in Dec 2017-18 estimation is (5600 thousand).
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