Brazil Coffee Output to Rise 15% to Record in 2014, Ecom Affirms

Bloomberg News (BN) Date: Jan 7 2014  15:54:17

Marvin G. Perez

     Jan. 7 (Bloomberg) -- Ecom Agroindustrial Corp., one of the

world’s biggest coffee traders, affirmed that output in Brazil,

the top grower, will rise at least 15 percent to a record this

year, topping a forecast by Volcafe Ltd.

     In the season that starts April 1, the harvest will be at

least 60 million bags amid favorable weather, Jorge Esteve

Jorge, the vice president at Empresa Interagricola, a unit of

Pully, Switzerland-based Ecom, said today in a telephone

interview. Last year, Ecom estimated output approaching 52

million bags, each weighing 60 kilograms or 132 pounds. This

season marks the higher-yielding half of a biennial cycle.

     “Things are still running very smoothly for the harvest,

with good rains and sunshine” for crop development, Esteve said

from Santos, Brazil. Areas that were hurt last year by dryness

during flowering, including Bahia and Rondonia states, are

improving, he said, affirming a November estimate.

     Yesterday, Volcafe, the coffee-trading unit of ED&F Man

Holdings Ltd., said output will be 51 million bags this year,

down 11 percent from its estimate of 57.2 million in 2013. The

reduction, mostly in the arabica variety, was attributed to tree

exhaustion and hard pruning by farmers, the Winterthur,

Switzerland-based company said.

     Brazil’s government estimated output last year at 49.2

million.

     Yesterday, arabica-coffee futures in New York posted the

the largest three-day rally in 15 months, partly on the Volcafe

report. Citigroup Inc. cut its output estimate as much as 10

percent to 52.6 million bags.

     Coffee futures tumbled 23 percent last year, the third

annual decline and the longest slide since 1993, as global

harvests are set to outstrip demand for the fourth straight

season, U.S. Department of Agriculture data show.

     Money managers and other large speculators have bet on

lower prices since July 2012, U.S. government data show.

     Ecom trades about 11 million bags of coffee a year, Esteve

said.