Coffee Supply May Climb in Three Years, Starbucks Executive Says

Coffee planting is expanding, allowing for “quite a bit” more supplies of beans in three years, according to Darcy Willson- Rymer, managing director of Starbucks Corp. for the U.K. and
Ireland. Willson- Rymer spoke at a conference in London today.

The difference between the price of coffee and the cost of production is at the highest in at least 13 years, he said Coffee Rises as Export Shipments May Start to Slow (Corrects to 41.9 million bags in fifth paragraph.)

Coffee rose in New York, erasing yesterday’s losses, on speculation growers won’t be able to keep up the recent pace of exports, limiting new supplies. Sugar advanced.

Bean exports for the season started Oct. 1 climbed to 42.3 million bags, up from 37.1 million bags a year earlier, according to the International Coffee Organization. Shipments in
February rose 15 percent from a year earlier to 8.5 million bags. The increase was lead by arabica beans, favored for specialty beverages such as those made by Starbucks Corp.
“The strong export performance in the first five months of coffee year 2010-11 is unlikely to be maintained in coming months, especially in light of reduced availability in Brazil,” the
London-based ICO said in a report yesterday.

Arabica coffee for May delivery rose 1.3 percent to $2.6855 a pound by 7:27 a.m. on ICE Futures U.S. in New York. Robusta coffee for July delivery advanced $16, or 0.7 percent, to
$2,405 a ton on NYSE Liffe in London.

Production in Brazil, the world’s largest producer, may fall as much as 13 percent to between 41.9 million bags and 44.7 million bags, the government’s crop forecasting agency, known
as Conab, estimated on Jan. 6.

Low Inventories

Inventories in coffee-producing countries are at the lowest since records began, according to the ICO. “With current low levels of world stocks and consumption showing continued dynamism, the prospects for the rebuilding of stocks are limited,” the ICO said.

Mexico’s coffee exports declined 16 percent last month from a year earlier to 331,318 bags, according to the country’s coffee association Amecafe. Shipments from Guatemala fell 6
percent in March to 453,572 bags, data from the country’s National Coffee Association, known as Anacafe, show. Both countries mainly produce arabica beans.