United States Department of Agriculture Foreign Agricultural Service Circular Series FTROP 2-04 June 2004 World 2004/05 Coffee Production Forecast To Rise as Brazil’s Crop Rebounds Higher Coffee Supplies in 2004/05 Forecast to Lead to Recovered Exports Million Bags Million Bags Other Mexico Indonesia Vietnam Colombia Brazil Other Mexico Indonesia Vietnam Colombia Brazil 90 80 70 60 50 40 30 20 10 0 1990/91 1992/93 1994/95 1996/97 1998/99 2000/01 2002/03 2004/05* 1990/91 1992/93 1994/95 1996/97 1998/99 2000/01 2002/03 2004/05* *Forecast *Forecast World coffee production in 2004/05 is forecast at 117.7 million bags (60 kilograms or 132.276 pounds), up 10 percent, or 10.8 million bags over the previous year. Most of the increase is attributed to the recovery in Brazil’s 2004/05 coffee production level. Brazil’s production of coffee during 2004/05 is forecast at 42.4 million bags, up from 32.0 million bags in 2003/04. As Brazil’s production is forecast to account for 36 percent of the world total in 2004/05, swings in Brazil’s supplies of coffee account for the change in the world total supplies of coffee. Total coffee supplies in 2004/05 are forecast at 142.6 million bags, up 4 percent from the previous year. As a result of the higher supplies, total coffee exports in 2004/05 are forecast at 90.1 million bags, up 4.5 million bags from 2003/04. For further information, please contact Debra A. Pumphrey at 202-720-8899 or send an email to [email protected]Approved by the World Agricultural Outlook Board/USDA 120 100 80 60 40 20 0
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United States Department of Agriculture
Foreign Agricultural Service
Circular Series FTROP 2-04 June 2004
World 2004/05 Coffee Production Forecast To Rise as Brazil’s Crop Rebounds
Higher Coffee Supplies in 2004/05 Forecast to Lead to Recovered Exports
Million BagsMillion Bags
Other Mexico Indonesia Vietnam Colombia Brazil
Other Mexico Indonesia Vietnam Colombia Brazil
90 80 70 60 50 40 30 20 10 0
1990/91
1992/93
1994/95
1996/97
1998/99
2000/01
2002/03
2004/05*
1990/91
1992/93
1994/95
1996/97
1998/99
2000/01
2002/03
2004/05*
*Forecast *Forecast
World coffee production in 2004/05 is forecast at 117.7 million bags (60 kilograms or 132.276 pounds), up 10 percent, or 10.8 million bags over the previous year. Most of the increase is attributed to the recovery in Brazil’s 2004/05 coffee production level. Brazil’s production of coffee during 2004/05 is forecast at 42.4 million bags, up from 32.0 million bags in 2003/04. As Brazil’s production is forecast to account for 36 percent of the world total in 2004/05, swings in Brazil’s supplies of coffee account for the change in the world total supplies of coffee. Total coffee supplies in 2004/05 are forecast at 142.6 million bags, up 4 percent from the previous year. As a result of the higher supplies, total coffee exports in 2004/05 are forecast at 90.1 million bags, up 4.5 million bags from 2003/04.
For further information, please contact Debra A. Pumphrey at 202-720-8899 or send an email to [email protected]
Approved by the World Agricultural Outlook Board/USDA
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Coffee Updates
World coffee production in 2004/05 is forecast at 117.7 million bags (60 kilograms or 132.276 pounds), up 10 percent, or 10.8 million bags from the previous year. Most of the increase is attributed to the recovery in Brazil’s 2004/05 coffee production level. Brazil’s production of coffee during 2004/05 is forecast at 42.4 million bags, up from 32.0 million bags in 2003/04.
Other significant changes in production include: India, up 501,000 bags; Burundi, up 473,000 bags; Colombia, up 300,000 bags; Nicaragua, up 120,000 bags; Peru, up 110,000 bags; Ethiopia, down 333,000 bags; Indonesia, down 250,000 bags; Vietnam, down 166,000 bags; Democratic Republic of the Congo, down 138,000 bags; and Guatemala, down 131,000 bags.
As Brazil’s coffee production is forecast to account for 36 percent of the world total in 2004/05, swings in Brazil’s supplies of coffee account for the change in the world total supplies of coffee. Total coffee supplies in 2004/05 are forecast at 142.6 million bags, up 4 percent from the previous year. As a result of the higher supplies, total coffee exports in 2004/05 are forecast at 90.1 million bags, up 4.5 million bags from 2003/04.
Brazil
Brazil’s coffee production for marketing year (MY) 2004/05 (July-June) is forecast at 42.4 million bags, up 10.4 million bags compared to MY 2003/04. The projected increase in production is solely associated with the Arabica variety, which is expected to yield 33.1 million bags or a jump of 10.5 million bags relative to the unchanged estimate for MY 2003/04 (22.6 million bags). There is a slight reduction forecast in 2004/05 for Robusta production.
The majority of Arabica trees for 2004/05 are in the “on-year” of the biennial production cycle, which will result in higher yields compared to the previous season. Coffee trees have recovered from the effects of lower precipitation and higher-than-average temperatures experienced during the July-October 2003 period in the states of Minas Gerais, Sao Paulo, and Bahia. The adverse weather conditions promoted higher than average flower abortion and fruit drop, thus diminishing the initial potential for the fruit setting. However, good weather conditions since November 2003 have supported a steady development of the trees and fruits. Overall, coffee trees show good vegetative development.
In spite of the good weather conditions during the blossoming period in the state of Parana, which resulted in good fruit setting, the dry weather that prevailed in the initial months of 2004 in some coffee areas of the state (northwest and part of the north) should affect production resulting in smaller and lighter beans and causing quality problems for the product. As a consequence of the dry weather, fruits were ready for ripening earlier than usual, and the harvest for Parana started in April.
Robusta production in MY 2004/05 in Espirito Santo has been affected by low precipitation from April to November 2003, which damaged flowering and fruit setting. However, steady rainfall as of December 2003 has ameliorated fruit development to some extent. Blossoming and fruit
setting in Rondonia is also reported to be partially damaged by drier-than-usual weather. As a consequence, total Robusta production for MY 2004/05 is projected down 100,000 bags from the previous season. The harvest season started in mid-April both in Rondonia and in the Robusta areas of Espirito Santo.
Brazil's Coffee Production State/Variety 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05
Brazil’s domestic coffee consumption in MY 2004/05 is forecast at 14.6 million bags, green equivalent, up 600,000 bags from the previous season. Roasted and ground coffee consumption should account for 13.9 million bags, while soluble coffee consumption is projected stable at 700,000 bags. This forecast takes into account the population growth rate and domestic campaigns to promote coffee consumption in Brazil.
Brazil’s total coffee exports for MY 2004/05 are projected at 26.9 million bags, green bean equivalent, up 13 percent from MY 2003/04, due to the expected higher availability of coffee supplies and strong competitiveness of Brazil’s coffee. The steady devaluation of Brazil’s currency, the real, vis-à-vis the U.S. dollar, and relatively low domestic coffee prices are important factors supporting coffee exports.
Brazil’s government and coffee industry officials have raised the volume limit at the official coffee auctions to 80,000 bags. The remaining auctions for the year are scheduled as follows: June 16, July 14, August 11, September 15, October 14, November 17, and December 15.
Brazil: Auctions of Government-Owned Coffee Stocks Date of Auction Quantity Offered Quantity Sold Price Range
60-kilogram bags Brazil reais/bag 2004 February 4 40,000 40,000 153.50-160.60 March 3 60,000 59,826 135.70-143.50 April 1 80,000 77,655 138.20-144.00 May 5 80,000 67,383 133.00-158.80 May 18* 200,000 155,973 201.75-207.60 May 26 200,000 197,659 209.88-214.08 June 2 80,000 77,890 133.00-136.00 June 2 200,000 200,000 241.20 *First auction from the 980,000 bags Brazil's government bought last year from producers via options contracts.
Colombia
Production is expected to return to a more normal production level of 11.6 million bags in 2004/2005. Production for 2004/05 will increase from the previous year since the weather during the first months of 2004 returned to a more normal pattern. Over the longer run, production under normal weather conditions is expected to be between 11.0 and 12.0 million bags. Marginal production areas are leaving coffee production and the more traditional coffee-producing areas are expected to intensify production under the tree renewal program. The total area planted is expected to continue to fall mainly in marginal production areas that have old plants of low quality and production. These marginal areas for coffee production are located mainly in the lower altitudes of the coffee farms.
The coffee renovation program ended in 2003 after covering 340,000 hectares (approximately half the current harvested area). The program received 5 years of continuous support from the Coffee Growers Federation (FEDECAFE). FEDECAFE started supporting renovation plans through distributing fertilizers to growers in such a way to assure improving quality. The coffee renovation program was only conducted and supported for the main coffee areas (located between 1,500 meters and 1,800 meters). Growers in these areas increased the density planted, which is currently calculated at 5,700 trees per hectare, up from 4,800 trees per hectare previously. Coffee plantations now have an average age of 5.5 years, down from the 7.5 years before the renovation program.
Colombia’s coffee is mainly produced for the export market. Green coffee beans made up 84 percent of coffee exports, while the remaining exports were roasted and soluble coffee. Total coffee exports in 2004/05 are forecast at 10.4 million bags, up only about 50,000 bags from the preliminary 2003/04 level.
Local coffee consumption is considered low when compared with other producing countries. A strong campaign to promote coffee consumption was conducted last year along with a 10-percent price discount for soluble branded coffee. The National Growers Federation opened new “Juan Valdez” branded stores in 2003 to take advantage of the brand name. The purpose of these stores is mainly to give consumers the opportunity of tasting 100-percent Colombian coffee, as a part of marketing higher-quality Colombian coffee.
Vietnam
Vietnam’s 2004/05 coffee production is forecast at 12.0 million bags, slightly lower than the 2003/04 crop due to a small decrease in area as some farmers look for more profitable crops. Most of the area reduction will occur in the Tay Nugyen/Central Highland provinces where some aged and low productivity coffee trees will be chopped down to grow other crops including cashews, corn, beans, and cocoa. The 2004/05 crop yield is expected to remain roughly the same as the 2003/04 level as coffee growers are not overly encouraged by current prices (although much better than several years ago), and the government warns farmers not to increase use of chemicals that might harm the environment in the long run.
Vietnam’s exports of coffee during 2004/05 are forecast at 11.5 million bags, down from the preliminary 2003/04 level of 11.7 million bags. Total supplies in Vietnam have been decreasing as the coffee crop has declined from the 2000/01 level of 15.3 million bags. Vietnam is looking to promote coffee to nontraditional and domestic markets. Reportedly, Vietnam's Coffee and Cocoa Association (Vicofa) has signed a cooperative agreement for annual coffee exports of around 170,000 bags of coffee to China. Vietnam hopes the populous neighboring country will become a potential market for Vietnam coffee.
Vietnam also sees an importance in promoting coffee in the domestic market of more than 80 million people. Vietnam coffee officials will work on promotion programs to increase coffee consumption in the domestic market to 1.0 million bags from the current level of 550,000 bags.
United States
U.S. Government Taking Steps To Rejoin the ICO
A high-level delegation from the United States attended the International Coffee Organization (ICO) meetings on May 18-21, 2004. The delegation attended the meetings as observers, but reportedly laid the groundwork for the United States to rejoin the ICO. In an ICO Council statement, it was acknowledged that the U.S. delegation participated in discussions with members of the ICO and made a statement to the Council that after the meetings there was now a “firm basis for the USA to consider the decision to accede to the 2001 Agreement in a positive light. It is hoped that the necessary formalities will be completed by 1 October 2004.” During the May meetings, the ICO amended Resolution 407, which the United States had objected to in the past. Resolution 407 attempted to improve the quality of members’ coffee production by setting recommendations that members were required to implement. The adoption of Resolution 420 makes these recommendations voluntary.
U.S. coffee stocks at the end of April 2004 totaled 5.85 million bags, down 109,665 bags from the March 31, 2004, level. Details follow in 60-kilogram bags.
U.S. Coffee Stocks
Location March 31 April 30 Difference
New York New Orleans Jacksonville Miami Houston Laredo Port Everglades San Francisco Los Angeles Seattle Norfolk Philadelphia Baltimore Total
Coffee: World Supply and Distribution for Producing Countries
Crop Beginning Total Total Total Total Bean Rst/Grn Soluble Domestic Ending Year Stocks Production Imports Supply Exports Exports Exports Exports Use Stocks
1/ One bag = 132.276 pounds. Green Bean Equivalent. F--Forecast.
June 2004 Horticultural and Tropical Products Division, FAS/USDA
Green Coffee: Total Production in Selected Countries 1/
Region and Country Year 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 Beg. Forecast
----------Thousand 60-kilogram bags 2/----------
North America: Costa Rica Cuba Dominican Republic El Salvador Guatemala Haiti Honduras Jamaica Mexico Nicaragua Panama Trinidad & Tobago United States 3/ Total
South America: Bolivia Brazil Colombia Ecuador Guyana Paraguay Peru Venezuela Total
Africa: Angola Benin Burundi Cameroon
October 2,688 2,502 2,338 2,207 2,119 2,050 July 328 313 285 239 220 275 July 694 437 432 426 625 575 October 2,612 1,624 1,610 1,351 1,250 1,285 October 4,364 4,564 3,530 3,802 3,802 3,671 July 402 422 402 384 420 400 October 3,067 2,821 3,098 2,661 2,817 2,753 October 39 37 30 45 43 40 October 6,193 4,800 4,200 4,350 4,500 4,500 October 1,514 1,610 895 997 1,380 1,500 October 167 170 160 140 170 160 October 16 14 14 14 12 12 October 185 183 163 163 174 174
22,269 19,497 17,157 16,779 17,532 17,395
April 184 173 124 149 160 150 July 30,800 34,100 35,100 51,600 32,000 42,400 October 9,512 10,500 11,950 11,712 11,300 11,600 April 1,295 1,005 910 790 796 750 October 10 10 10 10 10 10 April 28 31 31 30 35 35 April 2,571 2,824 2,550 2,760 2,870 2,980 October 880 1,027 1,065 920 825 840
45,280 49,670 51,740 67,971 47,996 58,765
April 55 50 21 56 100 60 October 0 0 0 0 1 April 501 337 257 433 102 575 October 1,370 1,113 686 801 1,150 1,100
Central African Republic October 241 122 75 92 158 125 Congo July 3 3 3 3 4 Congo, Dem. Rep. of the October 457 433 430 335 688 550 Cote d'IvoireEquatorial GuineaEthiopiaGabonGhanaGuineaKenyaLiberiaMadagascarMalawiNigeriaRwandaSierra LeoneTanzaniaTogoUgandaZambiaZimbabweTotal
Asia and Oceania:IndiaIndonesiaLaosMalaysiaNew CaledoniaPapua New GuineaPhilippinesSri LankaThailandVietnamYemenTotal
Grand Total
October 5,700 5,100 3,568 2,019 1,444 1,350 October 0 0 0 0 3 3 October 3,833 3,683 3,756 3,693 4,333 4,000 October 2 0 1 1 2 2 October 44 38 17 19 35 35 October 112 114 101 129 115 120 October 1,685 864 869 926 1,002 1,085 October 5 5 5 5 5 5 April 427 366 147 445 833 840 April 59 63 60 42 41 45 October 43 45 41 48 43 45 April 308 273 307 288 220 325 October 76 28 15 14 35 35 July 837 821 624 824 899 950 October 263 197 116 81 225 225 October 3,097 3,205 3,166 2,910 3,100 3,200 July 58 90 96 108 90 100 April 122 97 118 81 115 115
19,298 17,047 14,479 13,353 14,743 14,895
October 4,870 5,020 5,010 4,588 4,334 4,835 April 6,660 6,495 6,160 6,140 6,000 5,750 October 260 300 300 280 300 300 October 250 700 800 950 800 800 October 10 10 10 10 10 10 April 1,387 1,041 1,041 1,108 1,200 1,200 July 740 745 735 726 690 690 October 38 43 31 31 40 40 October 1,271 1,692 548 757 997 950 October 11,010 15,333 12,833 11,167 12,166 12,000 October 90 70 50 40 50 50
26,586 31,449 27,518 25,797 26,587 26,625
113,433 117,663 110,894 123,900 106,858 117,680
1/ Coffee marketing year begins October in some countries and April or July in others. Attaché reports were the basis for 84 percent of the forecast total. 2/ One bag = 132.276 pounds. Green Bean Equivalent. 3/ Includes Puerto Rico and Hawaii.
Note: Production estimates for some countries include cross-border movements.
June 2004 Horticultural and Tropical Products Division, FAS/USDA
1
4
Green Coffee: Exportable Production in Specified Countries 1/
Forecast Region and Country 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05
Grand Total 88,076 91,708 83,647 97,337 79,401 89,416
1/ Coffee marketing year begins in October in some countries and April or July in others. Exportable production represents totalharvested production minus estimated domestic consumption. Countries with the result of "0" may indicate domestic consumption equal to production or a country that imports more coffee than they export, in which case they are not regarded as having exportable production.2/ One bag = 132.276 pounds. Green Bean Equivalent.3/ Includes Puerto Rico and Hawaii.
June 2004 Horticultural and Tropical Products Division, FAS/USDA
World Coffee Supply and Distribution for Producing Countries, 2001/02
Region and Country Beginning Production Imports Total Domestic Exports Ending Stocks Supply Use Stocks
Note: Disappearance is derived on the basis of the data on net imports of all forms of coffee adjusted for changes in visible inventories. U.S. data are derived from roastings and net imports of processed coffee.
Source: International Coffee Organization.
June 2004 Horticultural and Tropical Products Division, FAS/USDA
Coffee: Specified Country Imports
Full Year Full Year Full Year Full Year Cumulative January Year to Year to Year to PercentCountry 2000 2001 2002 2003 Through Month Date Date Date Change from
Indicated 2002 2003 2004 Year Ago
Austria
Australia
Belgium-Luxembourg
Canada
China
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hong Kong
Hungary
Ireland
Italy
Japan
Korea, Rep. of
Lithuania
Morocco
Netherlands
New Zealand
Norway
Philippines
Poland
Portugal
Romania
Russia
Singapore
Slovakia
Spain
Sweden
Switzerland
Taiwan
Turkey
United Kingdom
1,301,000 1,495,000 1,486,000
924,164 891,400 1,114,000
3,273,000 3,203,000 3,788,000
3,140,000 3,134,000 2,923,000
52,400 54,100
865,500 937,500 918,800
1,028,000 1,079,000 1,078,000
105,569 103,900 118,600
1,078,000 1,093,000 1,083,000
6,506,000 6,709,000 6,908,000
----------60-kilogram bags 1/----------
August
October
September
September
March
September
November
September
October
October
September
12,910,000 15,256,000 15,935,000 15,959,000 January
812,400 860,500 893,700 October
187,013 175,500 153,900 October
895,300 936,400 925,600 November
155,700 182,200 177,400 August
6,335,000 6,569,000 6,556,000 September
7,360,000 7,359,000 7,635,000 October
1,316,000 1,331,000 1,395,000 1,384,000
879,700 -12.5
842,200 -11.4
2,785,000 -0.9
2,200,000 2.4
32,000
35,300 -15.6
934,800 11.4
754,500 -4.9
107,300 10.8
926,300 2.0
5,067,000 -1.9
1,373,000 1,132,000
852,800 13.1
129,700 3.4
865,300 2.3
144,700 31.3
5,184,000 5.5
6,112,000 -8.0
584,200 563,300 661,100 November 634,400 516,700
2,824,000 2,785,000 2,709,000 September 2,399,000 31.0
Source: International Coffee Organization (ICO).Note: N/A = not available.International Coffee Agreement (ICA) Other milds (OMs)1/ Cumulative through the latest month. New series for the calculation of the composite price from October 1, 2001.
June 2004
New York Spot Prices for Brazil's Arabica Coffee 1/
Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Annual
1/ Prices through 1980 New York spot Santos #4. Prices from 1981 are International Coffee Organization's quotes for New York spot market prices for Brazilian and Other Arabicas.
Note: N/A = not available.
Note: Cumulative for current year is cumulative through latest available month.
June 2004 Horticultural and Tropical Products Division, FAS/USDA
Average Monthly U.S. Retail Coffee Prices for Roasted Coffee 1/
Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Annual
1/ Instant coffee refers to soluble coffee that is neither flavored nor decaffeinated. Calculation of average retail prices for instant coffee began in July 1995. 2/ Cumulative through the latest month. N/A - Not Available.
Source: Bureau of Labor Statistics, U.S. Department of Labor.
June 2004 Horticultural and Tropical Products Division, FAS/USDA
U.S. Coffee Stocks 1/
Month End 1997 1998 1999 2000 2001 2002 2003 2004
--------Thousand 60-kilogram bags--------
January 1,342 1,421 1,751 3,136 5,603 5,381 5,866 5,624 February 1,546 1,712 1,936 3,501 5,778 5,361 6,063 5,828 March 1,657 1,827 2,410 4,056 5,958 5,283 6,269 5,955 April 1,855 1,862 2,534 4,618 5,894 5,315 6,373 5,845 May 1,977 1,997 2,672 5,012 5,973 5,061 6,458 June 2,116 1,907 2,750 5,443 6,054 5,137 6,326 July 2,335 1,811 2,880 6,133 5,996 5,285 6,365 August 2,583 1,821 2,883 6,245 5,910 5,343 6,227 September 2,294 1,680 2,824 6,259 5,793 5,488 6,090 October 1,911 1,477 2,713 6,023 5,566 5,513 5,984 November 1,515 1,268 2,397 5,758 5,356 5,545 5,678 December 1,428 1,408 2,627 5,593 5,398 5,720 5,490
1/ In bags of original weight. Includes Exchange and non-Exchange stocks.
Source: Green Coffee Association of New York City, Inc.
June 2004 Horticultural and Tropical Products Division, FAS/USDA
Per Capita Consumption of Coffee in Selected Importing Countries
1996 1997 1998 1999 2000 2001 2002
Kilograms
Total 4.64 4.60 4.64 4.70 4.53 4.56 4.54
United States 4.10 4.00 4.14 4.24 3.96 4.09 3.95
European Community 5.57 5.56 5.53 5.53 5.37 5.29 5.36