Post by Trade Coach on Mar 13, 2014 10:08:42 GMT 1
Ample Brazilian coffee stocks from the last harvest will allow the nation's exports to increase 6 percent this year and help ease the effects of a severe drought, coffee export association Cecafe said on Tuesday.
Cecafe expects exports to reach 33 million 60-kg bags in 2014, up from 31.1 million last season, General Director Guilherme Braga told Reuters by phone.
"On March 31 of last year, the government published its national stocks numbers, which had grown to 14 million bags," he said. "The year before, stocks were at 8 million bags."
Braga said it was too early to forecast the new crop, whose harvest starts in May. Analysts believe the drought in January and February shaved 11 percent off Brazil's overall output, according to a Reuters poll.
On Monday afternoon, Cecafe said Brazilian green coffee exports rose sharply to 2.515 million bags in February from 1.97 million a year ago.
The Agriculture Ministry's crop supply agency, Conab, plans at the end of March to publish fresh carry-over stocks numbers held by exporters, industry, cooperatives and producers.
Brazil harvested a bumper crop of 49.2 million bags last year, according to Conab, but market estimates range from 53 million to 60 million. The previous year's crop was similarly large.
The sharp rise in robusta exports in February to 143,000 bags is probably unsustainable through the year, Braga said, since domestic prices would make that coffee uncompetitive with its Vietnamese counterpart.
Meanwhile, arabica coffee prices have already risen more than 75 percent so far this year as traders digest the impact of the drought on global supplies.
A diminished Brazilian crop could result in the first global deficit in the commodity in five years.
Brazil is the world's leading exporter of naturally cured arabicas. They are the foundation of most of the world's leading blends, such as those sold under the Folgers and Maxwell House brands.
Rains have started to return to the coffee belt, but producers and analysts say they will not be able to reverse the damage that has already been done.
Conab in January forecast the new crop at 48.3 million bags, a figure that did not account for drought damage.
Braga said the recent sharp rise in coffee prices meant producers would not deliver 3 million bags to federal warehouses, choosing not to participate in the government's attempt to support prices through a put option program.
Instead, they will now sell the arabica beans on the open market, where they will get superior prices for them, he said.
"These 3 million bags will keep exports steady in July and June, while the new crop is being cured," Braga said. "Shipments are also typically strong in the cooler Northern Hemisphere months of October and November."
Producers had subscribed to the put option program in the second half of 2013, when prices were at multiyear lows.
Source: www.brecorder.com/markets/commodities/america/161921-brazil-2014-coffee-exports-to-rise-despite-drought.html
Cecafe expects exports to reach 33 million 60-kg bags in 2014, up from 31.1 million last season, General Director Guilherme Braga told Reuters by phone.
"On March 31 of last year, the government published its national stocks numbers, which had grown to 14 million bags," he said. "The year before, stocks were at 8 million bags."
Braga said it was too early to forecast the new crop, whose harvest starts in May. Analysts believe the drought in January and February shaved 11 percent off Brazil's overall output, according to a Reuters poll.
On Monday afternoon, Cecafe said Brazilian green coffee exports rose sharply to 2.515 million bags in February from 1.97 million a year ago.
The Agriculture Ministry's crop supply agency, Conab, plans at the end of March to publish fresh carry-over stocks numbers held by exporters, industry, cooperatives and producers.
Brazil harvested a bumper crop of 49.2 million bags last year, according to Conab, but market estimates range from 53 million to 60 million. The previous year's crop was similarly large.
The sharp rise in robusta exports in February to 143,000 bags is probably unsustainable through the year, Braga said, since domestic prices would make that coffee uncompetitive with its Vietnamese counterpart.
Meanwhile, arabica coffee prices have already risen more than 75 percent so far this year as traders digest the impact of the drought on global supplies.
A diminished Brazilian crop could result in the first global deficit in the commodity in five years.
Brazil is the world's leading exporter of naturally cured arabicas. They are the foundation of most of the world's leading blends, such as those sold under the Folgers and Maxwell House brands.
Rains have started to return to the coffee belt, but producers and analysts say they will not be able to reverse the damage that has already been done.
Conab in January forecast the new crop at 48.3 million bags, a figure that did not account for drought damage.
Braga said the recent sharp rise in coffee prices meant producers would not deliver 3 million bags to federal warehouses, choosing not to participate in the government's attempt to support prices through a put option program.
Instead, they will now sell the arabica beans on the open market, where they will get superior prices for them, he said.
"These 3 million bags will keep exports steady in July and June, while the new crop is being cured," Braga said. "Shipments are also typically strong in the cooler Northern Hemisphere months of October and November."
Producers had subscribed to the put option program in the second half of 2013, when prices were at multiyear lows.
Source: www.brecorder.com/markets/commodities/america/161921-brazil-2014-coffee-exports-to-rise-despite-drought.html