Global Coffee Deficit Predicted

In the period 2014/2015 demand for coffee will exceed supply due to lower levels of grain production in Brazil.

Tuesday, March 25, 2014

The next coffee crop cycle will be the first since 2009/2010 in which a deficiency will be registered in the market as an overall deficit of 612,000 bags of coffee is foreseen. "2014/2015 will see the lowest level of production since 2011/2012 and the largest annual percentage decrease since 2009/2010."

"It is largely due to Brazil's crop being smaller," said Keith Flury, agricultural markets strategist at BNP Paribas. Although the Government of Brazil, the world's largest producer of the aromatic estimated the 2013/14 harvest at 49.15 million bags, most of the industry expects about 53 million bags" Flury said.

"The projection of a deficit comes after the main producing region of Arabica coffee from Brazil suffered drought conditions in January and February, during the critical stage in which the grains grow on trees.

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June 2014

The future price fell to $169 from $215, the maximum price reached in April, after it was proven that the damage to crops caused by drought in Brazil was not as severe as anticipated.

Contrary to what was estimated a few months ago, the damage done to the coffee plantations in Brazil was not so serious as tol drastically affect the final production of the 2013-2014 harvest.

Coffee Prices Reach $215

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Volcafé, one of the largest traders in the world, has announced that its production will be 10% lower than the previous season, due to the effects of drought in Brazil.

After fluctuating for 4 weeks, the price of contracts with terms of one month for the arabica variety rose to $215 on April 23rd.

2010-2011 Colombian Coffee Crop May Drop

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Colombia’s coffee harvest may decline in 2011 after wet weather caused the worst outbreak of a plant-damaging fungus in a quarter of a century.

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Brazil Requests Coffee included in "C" Contract

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This is Brazil's third attempt to get its coffee traded on the New York's "C" market; if accepted, the price of arabica beans could drop to as low as $30 per hundredweight.

This is in the context of arabica futures currently trading at more than $180 per hundredweight, largely due to falling supplies.

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