A global coffee deficit is expect to continue for a second year in 2015/16 due to an expected slowdown of exports from top grower Brazil, reducing supplies to the world market, analysts said.
Brazilian exports had exceeded expectations in recent months, encouraged by a weak Brazilian currency and strong roaster demand.
But they could slow down in early 2016, Rabobank said in its latest Outlook report on prospects for agricultural commodity markets in 2016.
“We still believe fundamental bullishness will resurface once Brazilian exports run out of steam,” Rabobank said.
Rabobank sees a global coffee deficit of 2.7 million 60-kg bags in 2015/16, after a deficit of 6.1 million bags in 2014/15.
Volcafe, the Swiss-based coffee division of commodity trade house ED&F Man, cut its global 2015/16 coffee deficit estimate by about a third after Brazil’s stocks fell and those in consumer countries did not, a November report seen by Reuters on Wednesday said. (Full Story)
Volcafe pegged Brazil’s arabica deficit at 5 million bags in 2015/16, compared with an August estimate of 2.8 million bags, following an estimated deficit of 7 million bags in 2014/15 up from a previous forecast for a deficit of 5.6 million.
Brazilian trade ministry data on Wednesday showed slowing but still strong exports of coffee in November; 3.1 million 60-kg bags, down from 3.3 million bags in October.
Global arabica exports in October rose 1.9 percent year-on-year to 5.55 million bags, while robusta coffee exports fell 11.7 percent from a year earlier to 3.20 million bags. (Full Story)
Rabobank said it expected coffee stocks in non-producing countries to decrease by a few million bags, which is likely to occur by January 2016.
“Roasters have their own stocks and could run them down,” a senior London-based broker said.