Brazil 2015 Coffee Crop Seen Down 6.5% on Drought Damage: Licht

2014-09-26

By Marvin G. Perez Sept. 26 (Bloomberg) — The world’s biggest grower and exporter may collect 43m bags next yr vs 46m in 2014 as damage to arabica crops from 1Q drought extends into second yr, says Stefan Uhlenbrock, senior commodity analyst at F.O. Licht.

* “Limited branch growth” trimmed potential already expected to dip on smaller half of biennial production cycle, he says in telephone interview from Ratzeburg, Germany

* “Root systems were also damaged” and plants will need to regain strength befor e crop rebounds

* The drop in Brazilian output, which accounts ~1/3 of global harvest, signals 2nd straight global deficit in 2015-2016, he says, without providing figures

* While supplies are currently adequate to meet demand because Brazil accumulated inventory after big crops in 2012 and 2013, those stockpiles “will be depleted” by 2015-2016 * Prices not fully reflecting production outlook yet, as previous surpluses “distracting” traders, he says * NOTE: Through yday, arabica futures surged 65% in N.Y. amid supply concerns

* NOTE: Last yr, Brazilian farmers collected 52.8m bags, each weighing 60 kgs, or 132 lbs, Licht said in May