The International Coffee Organization’s (ICO) current estimate for global coffee production in crop year 2015/16 is of 143.4 million 60-kg bags, 1.4% higher than last year, ICO Executive Director Robério Oliveira Silva said at the World Coffee Conference in Ethiopia.
He said lower production in Brazil of 43.2 million bags has been compensated by increases in Vietnam, Colombia and Indonesia, among others.
In Africa, production is rising by 6.1 percent to reach 17.1 million bags, representing nearly 12 percent of the world total. In Ethiopia, output is currently estimated at 6.4 million bags, 3.4 percent less than last year, as the inconsistent rains have had a negative effect on the crop, he said.
Looking ahead to crop year 2016/17, Brazil’s National Food Supply Company (CONAB) have initially estimated production in the country at between 49.1 and 51.9 million bags. This could potentially be a record crop for Brazil, higher than the 50.8 million produced in 2012/13, Silva said.
Global coffee consumption in calendar year 2015 is estimated at 152.1 million bags, up from 150.3 million in 2014. Total consumption in importing countries is estimated at 104.9 million bags, while exporting countries have increased at an average rate of 2.1% over the last four years to reach 47.3 million bags.
Silva said these production and consumption figures suggest that 2015/16 will be another deficit year in the coffee market, with demand exceeding supply. This gap is being filled by buildup in stocks, particularly in exporting countries, in previous years when output was higher.
Coffee prices have stabilised recently, but they remain at very low levels. The average price of the ICO composite indicator price was 111.75 US cents/lb in February, 0.8% higher than the previous month, but down from 141.10 cents a year ago. This decline in the coffee market over the last 18 months has been mostly attributed to the ongoing depreciation in the Brazilian real against the US dollar, along with a broader weakness in global commodity prices.
Export levels have also remained strong, allowing inventories in importing countries to be well restocked and give roasters a considerable buffer against any short-term supply concerns. This has prevented prices from maintaining any significant rally, he said.