World Markets and Trade - Coffee Report 2013

World coffee production for 2012/13 is forecast at a record 151 million bags, up almost 7 million from the previous year, marking the third consecutive year of rising output. Brazil is forecast to account for nearly all the gain as its Arabica crop enters the on-year of the biennial production cycle, while Indonesia’s higher production is offset by Vietnam’s lower output. Colombia is forecast down slightly from last year to its lowest level in four decades. Global bean exports are forecast at a record. Although ending stocks are forecast higher, supplies remain tight.

2012/13 Forecast Overview 
Brazil’s production is forecast at a record 55.9 million bags, up 6.7 million from the previous year due primarily to the Arabica trees entering the on-year of the biennial production cycle. Whereas previous cycles grew steadily, this year it is forecast slightly below the last onyear due to frost damage and dry conditions in Minas Gerais, its main growing region. The Robusta harvest is forecast to continue expanding as favorable weather and good crop management aided fruit settings and development in Espirito Santo, where the vast majority is grown. Nearly half of the additional supply is expected to augment exports, with the rest going to modest gains in consumption and stocks.

Vietnam’s production is forecast at 25.0 million bags, down 1.0 million from last year’s record harvest (significant area expansion and record yield caused last year’s unexpected 30 percent production spike). Pre-season rain throughout the growing region caused an early bloom which lowered yield. Bean exports are forecast 2.0 million bags lower to 22.0 million, while ending stocks are expected to almost double to 1.8 million bags. Consumption is forecast to continue rising as the coffee culture spreads.

Indonesia’s production is forecast to rebound 1.4 million bags to 9.7 millionon favorable growing conditions, whereas the previous two harvests suffered from excessive rainfall. The forecast falls short of the record 2009/10 harvest because coffee area has since declined over 5 percent as
higher prices for cocoa, rubber, and palm oil encouraged substitution. Bean exports are forecast to recover 1.2 million bags to 6.1 million as production gains are mostly exported.

India’s production is forecast to rise 100,000 bags to a record 5.3 million on higher Robusta output. Growers in Karnataka, the largest coffee producing state, are anticipating a record Robusta harvest due to increased area and yield. Although bean exports are forecast to slip 100,000 bags to 4.1 million, this marks the third year of strong exports and declining stocks.

Colombia’s production is forecast to slide nearly 200,000 bags to 7.5 millionfollowing reports that production in the first two months of the OctoberSeptember marketing year was down 5 percent compared to the same period last year. This marks the lowest production in four decades and well below the record 18 million bags reached in 1991/92. For the fifth consecutive year, problems are expected to persist related to the coffee
cherry borer and rust. Also, the ongoing tree renovation program has the near-term effect of lowering output until these trees reach maturity. As a
result, bean exports are forecast at just 6.5 million bags, down 3 percent from the previous year. Bean imports, which jumped to 1.1 million bags
last year to supply consumption, are forecast to remain elevated at 900,000 bags.

Central America’s production is forecast to add 200,000 bags to total 14.6 million as modest gains in El Salvador and Honduras more than offset a slight decline in Costa Rica. Leaf rust was recently detected in several countries, constraining production. The region’s bean exports are forecast to rise 300,000 bags to 13.6 million.

The EU accounts for nearly half of world bean imports and is forecast to increase slightly to 45.5 million, with top suppliers including Brazil (28%), Vietnam (25%) and Honduras (7%). As a result, ending stocks are expected to remain tight near the decade low.

The United States imports the second-largest amount of coffee beans and is forecast to decrease slightly to 23.4 million, with top suppliers including Brazil (25%), Vietnam (18%) and Colombia (13%). Ending stocks as well as consumption are forecast to rise incrementally.