Central American Coffee Production May Drop as Leaf Rust Spreads
2013-01-24 19:53:56.883 GMT
By Andres R. Martinez, Andrew J. Barden and Isis Almeida
Jan. 24 (Bloomberg) -- Coffee output in Central America
and Mexico, which account for 14 percent of the worlds bean output,
may fall as a disease affecting foliage spreads. Guatemala, Central
Americas second-biggest coffee grower,may lose a third of its crop because
of leaf rust, PresidentOtto Perez Molina said today in Davos, Switzerland.
The crop inCosta Rica may be 30 percent to 40 percent smaller because
ofthe fungus, President Laura Chinchilla said in a separate
interview in Davos. Coffee exports from Honduras, the regions
biggest grower, will be down 767,000 bags due to leaf rust also
called roya, the Honduras Coffee Institute, or Ihcafe, said.
Coffee production in Mexico and Central America will be
19.7 million bags in the 2012-13 season that started Oct. 1,
theInternational Coffee Organization estimated in a report on Jan.
9. That is 2.8 percent lower than the previous forecast of 20.3
million bags, data from the London-based group showed. Farmers
around the world will harvest 144.1 million bags, the ICOestimates.
A bag of coffee weighs 132 pounds. The roya situation and the potential that next
seasonscrops may be impacted is certainly a current focus of themarket,
Keith Flury, an analyst at Rabobank International in London, said by e-mail
today. If the Central American crop is lower this will support coffee
Arabica coffee futures traded on ICE Futures U.S. in New
York declined 37 percent last year, the most in more than a
decade, partly because of a bigger crop in Brazil, the worlds
largest grower, and rising stockpiles. The beans favored by
Starbucks Corp. were the worst performing commodity in
the Standard & Poors GSCI gauge of 24 raw materials last year.
Prices are up 1.9 percent this year. Guatemalas government will help
growers cope with losses from the foliage-attacking disease, Perez Molina
said. Costa Rica will provide aid to farmers affected, said Chinchilla.
The disease will probably spread throughout the region as last
years slump in prices reduced farmers income, limiting their
ability to pay for chemicals to treat crops, said Stefan
Uhlenbrock, an analyst at F.O. Licht GmbH in Ratzeburg, Germany.
The minister of agriculture briefed us at the last
meeting and told us about the impact, which could be very
big,Perez Molina of Guatemala said. The government will help
farmers, especially small-and medium-sized ones.
The damage in Costa Rica may be very high, Chinchilla
said. The Costa Rican Coffee Institute, known as Icafe, cut the
nations production estimate to 1.648 million bags from a
previous forecast of 1.714 million bags, it said on Jan. 4.
Mexico and Nicaragua are also battling the disease.