Gourmet Coffees

World coffee production in 2006-07 is expected to rise to 123.1 million bags, up from 110.1 million in 2005/06, analyst F.O. Licht said in their latest report. Licht forecast that Arabica output would climb 13 % to 78.7 million bags while Robusta production was seen rising 9 % to 44.4 million. Brazil`s crop was seen at 43.5 million bags while Vietnam was expected to produce 15.0 million bags. Licht concluded that the anticipated rise in Vietnam...is likely to end tight supplies in the Robusta sector. Moreover, consumer stocks are still more than adequate so that consumers have no real reason for concern. They see consumption reaching some 117 to 118 million bags thereby reversing the deficit situation seen last season. They also mentioned that recent rains in Brazil`s coffee growing areas had alleviated stress caused by an extended dry spell earlier in the year.

This has aided the flowering of the 2007-08 crop which could be higher than had been predicted so far. So currently, Licht see a surplus of around 5 million bags. However, if we put the Brazilian (45 million bags) and Vietnamese crop (16 million bags) at the levels that some expect then a surplus of 7.5 million bags is seen. If this turns out to be the case then current levels for 2007 look expensive.