Private coffee stocks in the world's top producer Brazil fell to what may be a record low in March, causing exports to dip before a big off-cycle harvest replenishes inventories, a top industry official said on Thursday. Excluding stocks held by the government, inventories stood at around 6 to 7 million 60-kg bags at the end of March, Guilherme Braga, the head of the Council of Green Coffee Exporters, told Reuters in an Interview.
In the most recent official estimate by March 31, 2010, private and public stocks totalled 10.4 million bags compared with 14.7 million bags on the same date in 2009. With public stocks now roughly 2.1 million bags, that would suggest total private and public stocks may have nearly halved in 2 years. "It's one of the lowest levels, if not the lowest level," he said of the stocks held by producers, co-operatives, traders and exporters.
The estimates add to global evidence of tightening coffee supplies that have helped benchmark New York coffee futures more than double in the past year. Prices have slipped about 15 percent since reaching a 34-year high this month, however, as traders begin to look to the new harvest. Growers are at the initial stages of the 2011 harvest but the beans are not expected to reach the market for more than a month due to the time required for processing and transport.
As a result, unroasted green coffee exports should be around 2 million bags in June, similar to the 2.13 million bags in June 2009, the previous on-year season in a biennial cycle. Exports of green coffee should reach around 2.2 million bags in May, down from about 2.7 million bags in April, he said on the sidelines of an agribusiness seminar at the Sao Paulo futures exchange BM&F Bovespa.
The government has around 1.55 million bags of public stocks from the 2009 harvest which it said it is preparing to start selling in the coming weeks or months, in small batches to avoid driving coffee prices down.
Cecafe expected total output to exceed the official government estimate of 43.5 million bags by up to 1.5-2 million bags. Official estimates have long been seen as conservative though recently they have been closer to the private sector's.
This year's harvest is expected to be the largest ever for an 'off year' in Brazil's high-low coffee harvest cycle, and its eventual arrival might help cool the market.
Braga was enthusiastic about the good condition of the harvest, which some growers have begun picking, highlighting the simultaneous ripening of cherries meaning less unripe, green fruit in the mix that would reduce quality. "The harvest is developing in good conditions, and it has been much better cared for due the high prices which have motivated producers," he said, noting the fruit was also generally of a good size this year, meaning bigger beans.