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Brazilian Coffee Inventories Lowest in Ten Years

Heavy demand and inclement weather lead to low coffee inventories in Brazil, even as production levels rise in 2012
 Brazilian Coffee Inventories Lowest in Ten Years
 
 

Brazil is running out of coffee. Okay, not really – but it’s at least scraping the bottom of the coffee jar in a metaphorical sense. The world’s most prolific coffee producer has reached the lowest inventory levels in a decade.

According to Bloomberg Businessweek, it’s expected to be a banner year for coffee production in Brazil: reports indicate that production will ramp up from 43.5 million bags last year to a projected 49-52.3 million this year. But Silas Brasileiro, president of Brazil’s National Coffee Council (CNC), has told Bloomberg that this proliferation of coffee beans won’t cause a major change in coffee prices. That’s because Brazilian coffee growing cooperatives are also reporting a coffee stock level of 2.58 million bags – a drop of more than 26 percent compared to last year’s inventory level of 3.5 million bags, and the lowest inventory on record since 2002.

 

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“Even Brazil’s record crop will not weigh that much on prices due to low inventories,” Brasileiro said Jan. 17 in a telephone interview from Brasilia. “Inventories are very low because demand has been strong and weather hasn’t helped producing countries like Colombia.”

The production difference in Colombia is no joke – the CNC has noted that the country’s production levels in 2011 were at low not seen in 35 years. As the second largest producer of coffee beans, Colombia’s dearth of product has put a lot of pressure on Brazil to pony up the goods for consumers craving their daily coffee fix from points around the world.

CNC will be releasing its most up-to-date stock report in February, but as of now the price of Brazilian coffee is expected to stay in the vicinity of $2 per pound.

 

[Source: Bloomberg Businessweek]



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