Coffee Exports to Drop Amid ‘Scarcity,’ ICO Says

By Heather Walsh
Bloomberg

July 09, 2010



Exports will drop below last year’s estimated 95.5 million bags and slide from 2008’s 97.7 million bags, ICO Executive Director Nestor Osorio said in an interview yesterday. He didn’t specify the amount or percentage decline expected this year.

“There is less coffee available,” Osorio said by telephone from London. “That’s also reflected in the price.”

Coffee prices have increased 19 percent this year in New York amid a shortfall that has prompted investment funds to bet on gains, he said.

Production in Colombia, the second-largest producer of mild-tasting arabica beans, dropped to a 33-year low in 2009. Colombia may produce less than 9 million bags in the year that began Oct. 1, Osorio said.

In the first six months of the year, the crop unexpectedly slid to 4.04 million bags from 4.24 million bags a year earlier, Colombia’s National Federation of Coffee Growers said yesterday. In February, the group forecast output for the period of at least 4.9 million bags. Each bag weighs 60 kilograms (132 pounds).

In Brazil, the world’s largest producer of the bean, the quality of coffee was hurt by too much rainfall last year even as production increases, Osorio said. Brazil’s harvest, now under way, will rise to about 50 million bags from an estimated 39.5 million bags in the prior season, according to ICO figures.

Coffee demand in industrialized countries may be slowing compared with last year, Osorio said. In 2009, consumption worldwide rose by 2 million bags to an estimated 132 million bags, according to the ICO.

Arabica coffee for September delivery rose 1.25 cents, or 0.8 percent, to $1.6335 a pound at 12:46 p.m. on ICE in New York.

--Editors: Robin Saponar, Jessica Brice.
To contact the reporters on this story: Heather Walsh in Bogota at hlwalsh@bloomberg.net
To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net
Coffee exports from producing nations will decline for a second year in 2010 amid “scarcity” that has prompted a rally in New York futures, the International Coffee Organization said.