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USDA sees record 2017-18 coffee demand, stocks at 6-year low
[NEW YORK] Record global coffee consumption and flat production in 2017-18 will cause ending stocks to fall to a six-year low, the US Department of Agriculture (USDA) said on Friday.
Global coffee consumption will set a fresh record high at 158 million 60-kg bags in the 2017-18 marketing year (October/September) while output was forecast steady at 159 million bags, the USDA said in its biannual report.
A smaller harvest in top grower Brazil, due to 2017-18 being an off-year of the country's biennial production cycle, will be offset by increased production in Vietnam, Mexico and Indonesia, the report said.
Ending inventories were pegged at 34 million bags, the lowest since 2011-12 and down from 35.1 million bags in 2016-17.
Brazil was forecast to harvest 52.1 million bags in 2017-18, with 40.5 million bags of arabica and 11.6 million bags of robusta. This is down from a total crop of 56.1 million bags in 2016-17.
Vietnam, the world's biggest robusta producer, was forecast to harvest 28.6 million bags, up from 26.7 million bags in 2016-17.
Robusta futures on ICE rallied to a two-month high at US$2,149 per tonne on Friday as traders focused on expectations for tight supplies.
Though the USDA said Vietnam's production would rebound in 2017-18 due to good rains and use of fertiliser, weak carryover stocks from last year's drought would lower supply. As a result, it forecast bean exports will drop to 24 million bags, down 1 million bags from the prior year and a three-year low, with ending stocks at 1.3 million bags. This would be little changed from 1.2 million bags in 2016-17.
In Colombia, the world's top grower of washed arabica coffee, was expected to harvest 14.6 million bags, up slightly from 14.5 million bags the prior year, the USDA said.