Global coffee output will climb to a record next season, as the crop in top global producer Brazil rises, according to CoffeeNetwork, a unit of INTL FCStone Inc.
Farmers around the world will harvest 146 million bags in the 2012-13 season, an increase of 8.1 percent from an estimated 135 million bags in 2011-12, Andrea Thompson, the Belfast-based head of research and analysis at CoffeeNetwork, said. The 2012-13 season starts in October in most countries. A bag of coffee weighs 60 kilograms (132 pounds).
Production in Brazil will jump to 56 million bags in 2012-13 as arabica trees enter the high-yielding half of a two- year cycle, Thompson estimated. Output in the current season will be 49.2 million bags, according to the US Department of Agriculture. The season in Brazil usually starts in July.
Coffee climbed to a 14-year high of $3.089 a pound in New York in May as Brazil’s production dropped due to its biennial cycle and rains cut output in Colombia, the second-biggest arabica grower. Prices have fallen 39 per cent since then as traders sold the beans in anticipation of improved supplies.
“The tight supply situation in 2011-12 was one of the factors behind the rise in prices to multi-year highs,” Thompson said. “The market is now well off those highs and there has been a growing feeling as 2012 progresses that there is currently more downside potential than upside for the market.”
The global supply and demand balance may return to a surplus in 2012-13 after an estimated deficit of 1 million bags in the current season, according to CoffeeNetwork.