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Coffee Update


World coffee production in 2002/03 is forecast at a record 122.1 million bags (60 kilograms or 132.276 pounds), up 10 percent from the previous year's level. Brazil's crop in 2002/03 is forecast at a record 46.9 million bags, up 39 percent, or 13.2 million bags from the previous year. Mainly as a result of the large Brazil crop, total supply in 2002/03 is forecast to reach 143.6 million bags, up nearly 6 percent over the 2001/02 level. Total supplies of coffee have not reached this level since 1991/92 when they were 149.5 million bags. Brazil is expected to account for about 37 percent of total supplies in 2002/03, with Colombia's and Vietnam's share each forecast at 8 percent. In comparison, during 1991/92, Brazil's share of total supply was 34 percent; Colombia's, 16 percent; and Vietnam's share, only 1.5 percent.

In addition to Brazil, major upward production changes in 2002/03 versus 2001/02 include (in 60-kilogram bags): Mexico, up 500,000 bags; Nicaragua, up 300,000 bags; Thailand, up 157,000 bags; Kenya, up 130,000 bags; and Madagascar, up 100,000 bags.

Low global coffee prices for a sustained period of time have led many farmers to abandon trees and, in some cases, use less fertilizer. Not surprisingly, this reduced tree maintenance has led to lower yields. Countries where production is forecast to decline in 2002/03 include (in 60-kilogram bags): Vietnam, down 1.75 million bags; Dominican Republic, down 200,000 bags; Indonesia, down 200,000 bags; Zaire, down 170,000 bags; Honduras, down 150,000 bags; India, down 150,000 bags; Costa Rica, down 114,000 bags; and Colombia, down 100,000 bags.

Total coffee exports in 2002/03 are forecast at 92.0 million bags, up nearly 4 percent over 2001/02. Brazil accounts for most of the increase. Brazil's exports in 2002/03 are forecast at 28.6 million bags, up 15 percent or 3.7 million bags from the previous year.


Brazil

Brazil's coffee production forecast in 2002/03 (July-June) is 46.9 million bags. The arabica coffee production is forecast at 35.5 million bags, while robusta production is forecast at 11.4 million bags. The Agricultural Trade Office/São Paulo (ATO/SP) staff conducted five field trips through the major coffee producing areas to evaluate 2002/03 production. Trips were made in mid-December 2001 (southern Minas Gerais), January and February 2002 (Paraná, São Paulo, center-west Minas Gerais, eastern Minas Gerais, and Espírito Santo), and mid-April 2002 (southern Minas Gerais) to observe vegetative development, cherry set, and fruit formation.


Brazil's Coffee Production
State/Variety 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03

(Million 60-kilogram bags)

Minas Gerais 10.70 18.95 15.40 16.00 15.00 22.90
Southwest 1/ 5.50 10.75 8.40 9.00 7.50 12.60
Central-western 1/ 2.90 4.10 3.50 3.00 3.00 4.30
Southeast 1/ 2.30 4.10 3.50 4.00 4.50 6.00
Espirito Santo 4.00 5.35 4.70 7.40 9.70 10.80
Arabica 1.20 2.15 2.00 2.60 2.20 2.80
Robusta 2.80 3.20 2.70 4.80 7.50 8.00
Sao Paulo 1/ 3.00 4.20 3.70 3.60 3.00 4.85
Parana 1/ 2.50 3.20 2.80 2.20 0.50 2.50
Others 3.30 3.90 4.20 4.90 5.50 5.80
Arabica 1.80 2.10 1.90 2.20 2.30 2.40
Robusta 1.50 1.80 2.30 2.70 3.20 3.40
Total 23.50 35.60 30.80 34.10 33.70 46.85
Arabica 19.20 30.60 25.80 26.60 23.00 35.45
Robusta 4.30 5.00 5.00 7.50 10.70 11.40
1/ Arabica



Brazil's total 2002/03 exports are forecast at 28.6 million bags, a 15-percent increase compared to the 2001/02 level. Brazil's coffee is expected to remain competitive internationally due to the availability of product, low domestic prices, and the steady devaluation of the local currency vis-a-vis the U.S. dollar. Green coffee beans should contribute 26 million bags; roasted, 100,000 bags; while soluble exports are likely to remain stable at 2.5 million bags, green bean equivalent.

Brazil continues to offer government-owned stocks through its auction system.


Brazil: Auctions of Government-Owned Coffee Stocks

Date of Auction Quantity Offered Quantity Sold Price Range
--------60-kilogram bags-------- Brazil reais/bag
2001
December 12 20,000 14,331 avg. 76.58
2002
January 16 20,000 17,724 53.50-76.50
February 20 20,000 19,184 55.00-85.00
March 20 20,000 13,014 72.00-83.60
April 17 20,000 18,620 65.00-87.20
May 15 20,000 14,494 59.80-85.00
June 12 20,000 11,656 62.00-89.00


Colombia

Colombia's coffee production for 2001/02 is estimated to have reached 11 million bags, up from 10.5 million in 2000/01. This increase, in the face of low global prices, is because 200,000 hectares of coffee trees renovated during the1998-2000 period under a Fedecafe (National Coffee Federation) incentive program are now beginning to enter into full production. However, in 2002/03, production will not benefit as much from this factor and will begin to decline due to reduced use of inputs. Production in 2002/03 is forecast at 10.9 million bags. If low international prices persist, further decreases in production are almost certain. The historically low international coffee prices over the past year and a half, which on average are below the break-even point for growers, have forced farmers to sell off assets to generate working capital and cover living expenses. The combination of reduced farmer assets, the difficulty in finding credit, and the lack of resources in the National Coffee Fund make any recovery in Colombia's coffee sector largely dependent upon a recovery in international prices.

In addition, low international prices have eliminated the contribution to Fedecafe made by growers and exporters. As a result, many of the social and production-related programs supported by Fedecafe have been almost completely eliminated and the remaining ones are dependent upon fund transfers from the government and loans from overseas financial entities.


Vietnam

Coffee production during 2001/02 is estimated at 12.3 million bags, a decrease of 20 percent compared with the record level in 2000/01 because of a reduction in crop area and yield. The area reduction occurred mainly in key robusta-producing areas like Tay Nguyen (Central Highlands) provinces, where some low-yielding coffee trees were removed. Yields dropped due to drought and low input use (less investment in irrigation, pruning, and fertilization). In addition, many Central Highland areas have suffered from a prolonged drought from December 2001 until May 2002. In Dac Lac province, the crop yield was estimated to have declined by 15 percent and the 2001/02 crop area decreased by 7,000-8,000 hectares. During a recent visit to the province, U.S. Embassy agriculture employees saw some coffee areas being replaced by cashew trees inter-cropped with cassava plants. Cotton and corn are also considered by the regional government officials as good crops to replace coffee. In Lam Dong province, where the coffee area (estimated at about 140,000 hectares) is the second largest coffee area in Vietnam, there were about 20,000 hectares of coffee trees removed.

Coffee production is expected to be even worse in 2002/03 as a result of these factors. Coffee production during 2002/03 is forecast at 10.5 million bags, down 14 percent from this year. The province authorities are trying to encourage farmers to remove an additional 70,000 hectares of coffee trees by 2005. However, the process is slow as many farmers want to keep their coffee trees--hoping that prices will eventually improve. The provincial government strictly bans planting new robusta coffee trees by measures like land-use certificates and bank loan policies.


United States

U.S. coffee stocks at the end of April totaled 5.3 million bags, up 32,583 bags from the March 31, 2002, level. Details follow in 60-kilogram bags:

 

Location

 March 31 April 30 Difference
New York 1,336,396 1,332,845 (3,551)
New Orleans 2,051,110 1,998,623 (52,487)
Jacksonville 155,535 128,926 (26,609)
Miami 974,584 996,483 21,899
Houston 162,339 210,838 48,499
Laredo 117,269 136,219 18,950
Port Everglades 7,250 7,250 0
San Francisco 226,525 252,160 25,635
Los Angeles 970 1,207 237
Seattle 0 0 0
Norfolk 243,802 243,317 (485)
Philadelphia 6,743 7,238 495
Baltimore 0 0 0
Total 5,282,523 5,315,106 32,583

 

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Last modified: Sunday, March 17, 2013