Weakening of dollar worries ICO

International Coffee Organization (ICO) has revised world coffee production from 114 million bags to 116 million bags and has expressed concern over the weakness of the US Dollar.

ICO, Executive Director, Nestor Osorio in his monthly coffee market report said, "With regard to the crop year 2007-08, I have received information that leads me to revise my preliminary estimate of the world production from 114 million bags to 116 million bags."

"Also, I am concerned about the weakness of the US Dollar which continues to reduce the favourable impact of the firmness on the export earnings of exporting countries," he added.

The 2007-08 crop has been harvested in Brazil while harvesting has just begun in most other exporting countries.

"On the basis of the preliminary information provided by member countries, the total production for the crop year is expected to be around 116 million bags, about 9 million bags less than the 2006-07 figure due to the fall in production in Brazil and Vietnam," said Osorio.

"The anticipated increase in the crop of other countries will not be sufficient to offset the fall in production of both countries for the crop year 2007-08," he predicted.

On the basis of the adjusted data for a number of exporting countries, namely Colombia, Ethiopia, Vietnam, he said, "I have revised the figures of the total production of 121.6 million bags in crop year 2006-07 to around 125 million bags. This adjustment occurred after observing the export figures at the end of the crop year 2006-07 and various reports from exporting countries."

"Indeed, the production in Vietnam has been revised upwards to 18.6 million bags. Some sources indicate the Vietnamese production to be over 20 million bags," he added. On the exports front, for the 12 months from November 2006 to October 2007, it was 96.4 million bags, an increase of 7.7 per cent compared to 89.5 million bags for the period November 2005 to October 2006.

Vietnam exported 18.1 million bags between November 2006 and October 2007 compared to 13.1 million bags during the preceding 12-month period.