Commodities broker Marex Spectron, the company reported that it had increased its forecast of a global coffee deficit in 2015/16 year, but suggested that the next harvest in main producer Brazil, would add approximately 8 million bags, helping to establish a small global surplus.

After two years of problems we can expect that coffee trees produce good crops of Arabica this year, Marex Spectron said in a report on Brazil.

Despite a five-week period of abnormally dry and hot weather from mid-September until the end of October, at present everything points to a good development of the crop.

Cautioning that it is too early to specify the amount of the crop that will start to collect in may, Marex predicts the harvest of the season-2016/17 in Brazil at the level of 57.5-58 million 60-kilogram bags, including 41.8 million bags of Arabica.

Marex Spectron has also revised its forecast for coffee production in Brazil in 2015/16 to increase 500,000 bags to 49.5 million bags. The company expects the harvest in the season-2015/16 in Vietnam at 28 million bags, up 1 million bags below the last forecast, including 26.7 million bags of Robusta.

Carry-over stocks of Viet Nam were projected at a record high 7 million bags.

Marex Spectron has revised its forecast for global coffee deficit in 2015/16 season in the direction of increase of 3.4 million bags from the previous forecast to 2.8 million

The company came to the conclusion that the market will not face a supply deficit in 2015/16 year, because the total surplus accumulated in 2012-2014, has not been fully utilized.

Marex predicts that shipments of coffee from Brazil will slow to about 2.5 million bags per month in the first half of 2016.

Source: Thomson Reuters