some impact El Nino phenomenon upon coffee production 2016 : The main arabica coffee districts in South East Brazil continue to be in receipt of good rains and supported by the prevailing El Nino phenomenon within the Pacific Ocean, which traditionally brings increased rains for southern Brazil. Thus with the El Nino forecasted to carry on through the first quarter of the coming year, one might feel secure for the present, with the forecasts for a significantly larger new arabica coffee crop for the coming year, which some are indicating might be as much as 40 million bags.
There does however continue to be problems for the conilon robusta coffee districts further to the north of the main arabica coffee districts and over the state of Espirito Santo, where rains have remained dismal in volume for the past three months. This situation and with water support for the many irrigated farms becoming threatened, is underpinning the forecasts for a significantly lower conilon robusta coffee crop for the coming year, which might prove to be less than 15 million bags.
If one is to take this situation for the potential dip in the conilon robusta crop for the coming year, it would make one question the earlier forecasts for a new 2016 Brazil crop of close to 60 million bags. These ambitious forecasts might of course be realistic but one might be safer in terms of planning, to be looking towards a new Brazil crop that is closer to 55 million bags. Thus while it would be a crop sufficient to cover domestic and export market demand, it would be a crop that would contribute only modest volumes towards the rebuilding of what shall be by then, the much depleted Brazil carry over coffee stocks.
Added to the mixed weather issues in Brazil that have come with the El Nino phenomenon and one that has worldwide impact, is the potential for this phenomenon and the dry weather it is bringing to Indonesia, to perhaps result in a dip in Indonesian coffee production in the coming year. Some are suggesting that this decline in Indonesian coffee production which has recorded good production levels this year, might even see the crop next year dip in excess of 2.5 million bags.
Such a dip with the Indonesian coffee production dominated by the robusta coffees that this year accounted for approximately 86% of total production shall be easily countered through the coming year by the approximate 2 million to 3 million bags of increased production from the new Vietnam crop depending upon which forecast one is to believe, but such a problem in Indonesia shall most probably tighten up global robusta coffee supply by the second half of next year.
All this said and with the influences of the El Nino which also is going to have some impact upon coffee production within other leading coffee producer blocs and including Colombia, Peru, Central America, East Africa and India, one might think that by the second quarter of next year there might be fundamental reasons for tightening coffee supply to be hitting the coffee press. Thus making one think that the coffee markets that are presently under pressure from the short sold managed money funds and speculative sectors of the market, might have limited downside potential, but have rather a more significant longer term upside potential. However with still the prospects for sufficient global coffee supply, to provide for a producer selling ceiling to the markets and to limit the probability of surging market prices for the coming year.
There does however continue to be problems for the conilon robusta coffee districts further to the north of the main arabica coffee districts and over the state of Espirito Santo, where rains have remained dismal in volume for the past three months. This situation and with water support for the many irrigated farms becoming threatened, is underpinning the forecasts for a significantly lower conilon robusta coffee crop for the coming year, which might prove to be less than 15 million bags.
If one is to take this situation for the potential dip in the conilon robusta crop for the coming year, it would make one question the earlier forecasts for a new 2016 Brazil crop of close to 60 million bags. These ambitious forecasts might of course be realistic but one might be safer in terms of planning, to be looking towards a new Brazil crop that is closer to 55 million bags. Thus while it would be a crop sufficient to cover domestic and export market demand, it would be a crop that would contribute only modest volumes towards the rebuilding of what shall be by then, the much depleted Brazil carry over coffee stocks.
Added to the mixed weather issues in Brazil that have come with the El Nino phenomenon and one that has worldwide impact, is the potential for this phenomenon and the dry weather it is bringing to Indonesia, to perhaps result in a dip in Indonesian coffee production in the coming year. Some are suggesting that this decline in Indonesian coffee production which has recorded good production levels this year, might even see the crop next year dip in excess of 2.5 million bags.
Such a dip with the Indonesian coffee production dominated by the robusta coffees that this year accounted for approximately 86% of total production shall be easily countered through the coming year by the approximate 2 million to 3 million bags of increased production from the new Vietnam crop depending upon which forecast one is to believe, but such a problem in Indonesia shall most probably tighten up global robusta coffee supply by the second half of next year.
All this said and with the influences of the El Nino which also is going to have some impact upon coffee production within other leading coffee producer blocs and including Colombia, Peru, Central America, East Africa and India, one might think that by the second quarter of next year there might be fundamental reasons for tightening coffee supply to be hitting the coffee press. Thus making one think that the coffee markets that are presently under pressure from the short sold managed money funds and speculative sectors of the market, might have limited downside potential, but have rather a more significant longer term upside potential. However with still the prospects for sufficient global coffee supply, to provide for a producer selling ceiling to the markets and to limit the probability of surging market prices for the coming year.
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