Coffee Market 2017-2018: Analysis

The three main factors affecting global coffee market are, prevailing weather  in producing countries, consumption rate and the state of inventaries. Hence an assessment of these three factors will give us a fair idea of future market. All these factors are sometimes turn to be very complex and hence variation in prediction often occur.

Brazil is  the worlds largest producer of coffee beans. Brazilian coffee growers  have  completed their coffee harvest  for the year 2016-2017. There is a significant increase in Arabica production and significant decrease in Robusta production compared to 2015-2016. The prospect of a good 2017-2018 harvest looks bleak since the rains have come too early, resulting in flowering, but there is little followup rain. The prevailing dry weather is damaging the setting of flowers. If this trend continues for few more days there will be a major dent to good crop prospects.

Vietnam Robusta coffee production was down in 2016-2017 compared to previous year, 2015-2016. Prospects of good 2017-2018 crop is strong owing to good rain and weather conditions.

Production in Colombia has been steadily increasing year on year owing to massive replantation of rust resistant varieties. However 2016-2017 harvest is expected to increase only marginally compared to previous harvest.

Indonesia harvest for 2017-2018  is expected to be flat  to slight increase compared to previous harvest season.

World coffee production for 2017/18 is forecast at 159 million bags (60 kilograms), unchanged from the previous year. Where as global coffee consumption is expected to hit a record 158 million bags.

The stock to use ratio of Coffee for 2017-2018 is forecast at 30 percent which is lowest since 2009-2010, according to Rabobank, concluding that any weather issues before or during next harvest season i.e 2017-2018 will have a exacerbated price impact.


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