RTRS-Reuters Poll-Arabica Coffee Ice Futures ForecastTo End 2013 Up15 PCT At $1.65/LB

* Arabica futures seen rising around 15 pct in 2013
* Roya disease is risk to output going forward

By Sarah McFarlane

LONDON, Jan 23 (Reuters) – Arabica coffee prices are expected to stage a modest recovery in 2013 after suffering some of the greatest losses amongst commodities in 2012, a Reuters poll of 20 analysts and traders showed on Wednesday.

Prices for arabica were expected to trim 2012`s losses, rising around 15 percent in 2013 to $1.65 per lb. However, a global coffee surplus – particularly of the arabica variety – would prevent a full recovery.

Arabica coffee futures on ICE finished 2012 down nearly 37 percent, recording the largest fall of 19 commodities on the Thomson Reuters-Jefferies CRB index, after ample supplies dragged on the market.

Poll responses were unanimous on expectations for another global surplus of coffee in 2012/13, with top producer Brazil`s imminent record off-year crop expected to cap price gains.

The median forecast for Brazil`s 2013/14 crop was for the country`s largest ever off-year crop at 52.5 million 60-kg bags and responses ranged from 48 million bags to 55 million bags.
This is slightly higher than the Brazilian government`s estimate of up to 50.2 million bags and shows the gap is closing between on- and off-year crops. [ID:nL1E9C93WR]

Brazil`s coffee production rises and falls from one year to the next due to a biennial cycle. The 2013/14 crop, like the 2011/12 crop year, will come in a lower-output off-year while last year`s 50.8 million bag harvest came in a larger on-year.

DISEASE FEARS

Reports of roya coffee tree disease in Central American producers in the past month was one factor that numerous respondents noted could boost arabica prices going forward, depending on the extent of any damage.

Roya is known as leaf rust due to the powdery orange spores that appear on the underside of infected leaves. They eventually turn black and fall off, killing or severely weakening the tree.[

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“It`s unlikely it`s a significant issue for 2012/13,” said a European analyst.
“Anyone talking about 2013/14 is hypothesising because those crops haven`t even flowered yet but I think it has to be a major risk.”

In Vietnam, the world`s top robusta coffee producer, the median forecast for the 2012/13 crop was 25 million bags, from responses ranging between 23 million and 28 million bags.
This is down from a record harvest of around 26.5 million bags the previous year.

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“If Vietnam`s crop is lower then you are going to see a balance in robusta supply and demand and a surplus in arabica,” said a dealer.

The median forecast for world 2012/13 coffee output was 147 million bags, compared with demand of 141 million bags.

Demand growth for the cheaper and more bitter tasting robusta beans, often used for instant coffees, has outstripped the pace of demand growth for higher quality arabicas in recent years.
This has supported Liffe robusta futures prices , which ended 2012 up 6 percent on the year at $1,924 per tonne.

Respondents forecast robusta prices would build on those gains to increase around 14 percent in 2013 to $2,200 per tonne.

(Additional reporting by Marcy Nicholson in New York, Peter Murphy in Brazil, Ho Binh Minh in Vietnam and Lewa Pardomuan in Singapore; Editing by Veronica Brown and Alison Birrane) ((sarah.mcfarlane@thomsonreuters.com)(+44 20 7542 5937)(Reuters Messaging: sarah.mcfarlane.thomsonreuters.com@reuters.net))
Keywords: COFFEE/POLL

SOURCE: http://www.asiacommodities.com.vn/index.php?mod=detailnews&id=1692