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Aug 26, 2023

Global coffee output seen down over 23/24 season

in Commodity News30/08/2023 Global coffee production is likely to be smaller than expected in the 2023/24 season starting October and ending September next year,but a fall in demand – particularly in

in Commodity News30/08/2023

Global coffee production is likely to be smaller than expected in the 2023/24 season starting October and ending September next year,but a fall in demand – particularly in Europe – will prevent a supply shortfall, Rabobank Research said in a note on Tuesday.

The Dutch bank, which has a strong presence in agricultural financing, projected global coffee production in 2023/24 at 172.6 million bags, a drop of1.6 million bags from its previous forecast, due to downward revisions mainly for production fromColombia and Vietnam.

The crop in Colombia was lowered to 12.5 million bags from 13.6 million bags, while Vietnam is now seen producing 29 million bags, half a million bags less than expected. Both countries are dealing with less-than-ideal weather.

Rabobank, however, kept its estimate for a balanced global supply in 2023/24, citing falling demandin non-producing countries.

“Import demand figures were very gloomy throughout Q2 2023,” the report said, citing a fall of 13.4% year-on-year on net imports into the European Union plus theUnited Kingdom region.

Coffee imports in the United States were down 9.6% in the second quarter from a year earlier, the bank said, adding that the fall in coffee imports was the largest since it started to compile that type of data in 2008.

“As we have been pointing out for most of last year, the rise in interest rates should have led to a decline in inventories along the pipeline,” the bank said.

The report also noted that coffee prices are coming down in the U.S. due to competition, pressure from retailers and concerns about low consumer sentiment.Source: Reuters (Reporting by Marcelo Teixeira, ediitng by Deepa Babington)