coffee market outlook sept 2014
DESCRIPTION
Cofee MarketTRANSCRIPT
Coffee market outlook
Mauricio GalindoMauricio Galindo22nd September 2014
ICO indicator pricesICO indicator prices
250
200
250
150
200
ents
/lb
100
US
ce
50
ICO composite Colombian Milds Other Milds Brazilian Naturals RobustasICO composite Colombian Milds Other Milds Brazilian Naturals Robustas
Price volatility & Arabica/Robusta arbitrage
20% 150
15%
20% 150
10%
15%
%)
100
ents
/lb
5%
10%(%
50US
ce0% 0
Volatility Arbitragey g
Coffee productionCoffee production
150• 145.2 million bags in
2013/14
150
2013/14
• Roughly unchanged100
n ba
gs
Roughly unchanged
on 2012/1350Mill
ion
– Robustas 6%0 – Arabicas 4%0
Arabicas RobustasArabicas Robustas
Production in BrazilProduction in Brazil
40• New estimate for 2014/15: 45.14 million bags 8 2% lower than 30
40
bags, 8.2% lower than 2013/14
20
30
n ba
gs
• Arabica 16.6% lower, but Robusta up 19.9% 10
20
Mill
ion
obus a up 9 9%
• Record crops in 2013/14 0
10
• Record crops in 2013/14 and 2012/13
0
Arabica ConilonArabica Conilon
Coffee Leaf Rust in Central America:2014/15 update
Production Production Value lossesArea affected
(hectares) % incidence
Production change
(2012-2013)
Productionchange
(2013-2014)
Value losses(2011-2013
US$ million)Costa Rica 60,000 60% -12% 3% 43Dominican Republic 80,000 65% -43% 20% 34
El Salvador 66,000 45% -20% 64% 70
Guatemala 97,000 36% -6% 8% 132
Honduras 70,000 60% -15% 23% 91
Jamaica 170 20% -5% -5% 5
Nicaragua -20% 46
Panama 15 000 65% 25% 5% 6Panama 15,000 65% -25% -5% 6
Peru 270,000 60% -23% 0
TOTAL 658,170 51% -18% -2% 615
Source: PROMECAFE, JNC (Peru)
Recovery in ColombiaRecovery in Colombia
• Production for the first 11 months of 2013/14: 11 2 million bags 111.2 million bags
• 24% higher than 2012/13
1
n ba
gs
• 24% higher than 2012/13
• On course for highest
0.5Mill
ion
• On course for highest production level since 2007/08 02007/08
2010 2011 2012 20132010 2011 2012 2013
Exports:(12 months ending July)
120• 109.7 million bags in the last 12 months 100
120
• 1.7% less than last 60
80
n ba
gs
1.7% less than last year, but second-highest on record 20
40Mill
ion
highest on record
0
20
Colombian Milds Other MildsBrazilian Naturals RobustasBrazilian Naturals Robustas
Exports from BrazilExports from Brazil
• High monthly exports despite the drought.
3
• Suggests that stocks2
n ba
gs
Suggests that stocks in Brazil will be heavily drawn down 1
Mill
ion
heavily drawn down this year.
00
2012/13 2013/14 2014/152012/13 2013/14 2014/15
Inventories in importing countriesInventories in importing countries
330 330
220
n ba
gs
St k
110
Mill
ion Stocks
Stocks/use(months)(months)
00
Consumption looking ahead to 2020Consumption – looking ahead to 2020
200200
150
n ba
gs
100
Mill
ion
Emerging marketsTraditional marketsExporting countries
50
0
Renewed demand in traditional marketsRenewed demand in traditional markets
• Relatively slow growth in the last few
40
years 30
n ba
gs
• But stronger increase in 2013 10
20
Mill
ion
in 2013– EU +2.0%– USA +5 3% 0
10
USA +5.3%– Japan +4.3%
0
2010 2011 2012 20132010 2011 2012 2013
Market outlookMarket outlook
• Supply & Demand– Drought in Brazilg– Coffee leaf rust in Central America
Growing demand– Growing demand
• PricesVolatility– Volatility
– Arabica/Robusta arbitrage widening