Coffee output in Brazil and Colombia, the largest arabica producers, will probably make up for leaf rust losses in Central America and Mexico for now, according to the International Coffee Organization.
Brazil, the largest producer, will help make up for losses due to large crops and biggerstockpiles, Mauricio Galindo, head of operations at the ICO, said in an interview in London yesterday. Colombia will have a bigger crop, he said.
Brazil “has pretty consistent supply” because it has been able to minimize production changes from one year to the next in its two-year coffee cycle, Galindo, former head of agricultural commodities research at JPMorgan Chase & Co., said. “The fact that Colombia has gone to replant 70 percent of trees by now, it should start increasing productivity substantially already in this crop year. Certainly the big jump we will see is in 2013-14.”
Arabica coffee futures have dropped 2.1 percent this year as new harvests added to global stockpiles. Inventories in warehouses monitored by ICE Futures U.S. in New York climbed 1 million bags last year and are up another 135,937 bags in 2013.