ICO head says low producer coffee stocks worrisome

NEW YORK (Reuters) – The world’s 2006/07 coffee supply and demand are near a balance, although low carryover stocks in producing countries is “very worrisome,” the head of the International Coffee Organization (ICO) said on Friday.

“Never before have we seen a situation which producing countries’ stocks are at such low levels,” Nestor Osorio, executive director of the ICO, told a coffee industry conference on Friday.

By the end of March, carryover stocks in Brazil, the biggest coffee producer and exporter, are likely to be about 9 million 60-kg bags, down about 50 percent from the same period last year and the lowest since 1957, Osorio said.

Carryover stocks in all producing countries amount to about 20 million to 22 million bags, he told Reuters on the sidelines.

In its last monthly market report, the ICO projected world 2006/07 coffee production between 120 million and 122 million 60-kg bags, putting supply at a slight surplus, following a deficit of several million bags in the 2005/06 season.

Based on the current development of production and demand, Osorio said the balance is “likely to be very close.”