Coffee Futures - Brazil coffee production Outlook 2016- 2017 : Brazilian coffee production in the 2016/17 season won't reach the 60 million to 62 million bags forecast at the start of the season, according to Olam International on Friday.
"Irregular rains and drought and less than perfect soil moisture has reduced the potential of the crop," a spokeswoman for the Singapore-based agricultural trading house said in a email to The Wall Street Journal.
Weather pattern El Nino has already caused drier conditions in Vietnam and Indonesia, as well as in South America, which could harm crops and lead to dwindling supplies.
The company expects three years of deficits to support prices over the longer term.
"Even if you still pencil in a big crop--we see a 'three-year cumulative deficit' persisting...making us believe that coffee is extremely undervalued," she said.
Prices for both robusta coffee, often used in instant varieties, and arabica coffee have slumped in the past 12 months thanks largely to a glut in supply of Brazilian beans stoked by the slump in the country's currency, the real.
"Irregular rains and drought and less than perfect soil moisture has reduced the potential of the crop," a spokeswoman for the Singapore-based agricultural trading house said in a email to The Wall Street Journal.
Weather pattern El Nino has already caused drier conditions in Vietnam and Indonesia, as well as in South America, which could harm crops and lead to dwindling supplies.
The company expects three years of deficits to support prices over the longer term.
"Even if you still pencil in a big crop--we see a 'three-year cumulative deficit' persisting...making us believe that coffee is extremely undervalued," she said.
Prices for both robusta coffee, often used in instant varieties, and arabica coffee have slumped in the past 12 months thanks largely to a glut in supply of Brazilian beans stoked by the slump in the country's currency, the real.
0 Response to "Brazil coffee production Outlook 2016- 2017"
Post a Comment