Brazil Coffee Output to Rise 15% to Record in 2014, Ecom Affirms
By Marvin G. Perez
Jan. 7 (Bloomberg) -- Ecom Agroindustrial Corp., one of the world’s biggest coffee traders, affirmed that output in Brazil, the top grower, will rise at least 15 percent to a record this year, topping a forecast by Volcafe Ltd.
In the season that starts April 1, the harvest will be at least 60 million bags amid favorable weather, Jorge Esteve Jorge, the vice president at Empresa Interagricola, a unit of Pully, Switzerland-based Ecom, said today in a telephone interview. Last year, Ecom estimated output approaching 52 million bags, each weighing 60 kilograms or 132 pounds. This season marks the higher-yielding half of a biennial cycle.
“Things are still running very smoothly for the harvest, with good rains and sunshine” for crop development, Esteve said from Santos, Brazil. Areas that were hurt last year by dryness during flowering, including Bahia and Rondonia states, are improving, he said, affirming a November estimate.
Yesterday, Volcafe, the coffee-trading unit of ED&F Man Holdings Ltd., said output will be 51 million bags this year, down 11 percent from its estimate of 57.2 million in 2013. The reduction, mostly in the arabica variety, was attributed to tree exhaustion and hard pruning by farmers, the Winterthur, Switzerland-based company said.
Brazil’s government estimated output last year at 49.2 million.
Yesterday, arabica-coffee futures in New York posted the the largest three-day rally in 15 months, partly on the Volcafe report. Citigroup Inc. cut its output estimate as much as 10 percent to 52.6 million bags.
Coffee futures tumbled 23 percent last year, the third annual decline and the longest slide since 1993, as global harvests are set to outstrip demand for the fourth straight season, U.S. Department of Agriculture data show.
Money managers and other large speculators have bet on lower prices since July 2012, U.S. government data show.
Ecom trades about 11 million bags of coffee a year, Esteve said.