More on the leaf rust situation...

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
  prices. 
                            Coffee Futures
   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.