Adverse effects of weather on expected decline in coffee production in Brazil and Colombia in 2018

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According to Agrimoney.com, the International Coffee Organization (International Coffee Organization, ICO) said in its monthly report on March 7 that since October last year, Colombian coffee production is expected to decrease by 4.3% or 630000 packets to 14 million packets (60 kg each), mainly affected by excessive rainfall. According to the Colombian Coffee Growers' Federation (Fedecafe), coffee production in the country fell by 9.6 per cent to 6.27 million bales annually as of the end of February.

Fedecafe, which represents 540000 Colombian coffee farmers, estimates that in the 2018 calendar year, Colombian coffee production is about 1,350-14 million packets. Despite the recent excessive rainfall, Fedecafe said the damage caused by rain was much lower than originally expected. At the end of last year, Fedecafe also estimated that coffee production would fall by 20 per cent a year in the first half of 2018, but the latest report has been revised to an annual decline of 3 per cent.

Fedecafe said that in February, the country produced 1.212 million packets of coffee, an increase of 7.2 per cent over the previous month, but a decrease of 6.3 per cent from the same period last year, compared with 13.97 million packets in the 12 months to the end of February. Coffee exports in February fell 7.7 per cent to 1.096 million bales a year.

The average monthly price of ICO composite coffee fell 1.2 per cent to 114.19 cents a pound in February, according to the ICO monthly report. In January, exports of robusta coffee increased by 48 per cent to 4.48 million bales a year, while exports of robusta coffee increased by 6.4 per cent to 14.87 million bales in the first four months of 2017. Among them, the export volume of Vietnam, the largest producer of Robusta coffee, nearly doubled to 3.29 million packets compared with the same period last year.

In January 2018, global coffee exports increased by 20.7% to 11.01 million bales per year. In the first four months of the 2017-18 year, global coffee exports increased by 3.1 per cent to 40.74 million bales compared with 39.53 million bales in the same period last year, with Arabica coffee exports rising 1.3 per cent to 25.87 million bales annually.

Coffee production in Brazil, the largest coffee producer, is expected to fall 6.4 per cent to 51.5 million packets a year in 2017, with Arabica coffee production expected to fall 11 per cent to 40 million packets and Robusta coffee production expected to increase by 15 per cent to 11.5 million packets per year, ICO said. However, although coffee production is expected to decline this year, Brazilian coffee production is expected to increase next year (2018 on 19) due to the favorable weather in the Arabica coffee producing areas.

Among the major Robusta coffee producing countries, Vietnam's coffee production is expected to increase by 11.6% to 28.5 million bales in 2017, Indonesia's coffee production is expected to decrease by 6% to 10.8 million bales, and India's coffee production is expected to increase by 12.3% to 5.84 million bales.

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