NOOOOO! Not the COFFEE!!!!!!
Coffee shortage brewing after poor Brazil crop
By Chris Flood
Published: January 13 2009 12:11 | Last updated: January 13 2009 19:26
A substantial fall in Brazilian coffee production this year looks likely to drag the global coffee market into a supply deficit in 2009-10, according to the International Coffee Organisation which released its latest monthly report on Monday.
The ICO said Brazil’scoffee production, which follows a biennial cycle (high output one year followed by low the next), could fall from 46m 60kg bags in 2008-09 to between 36.9m and 38.8m bags this year, a drop of 16 to 20 per cent.
The ICO said the preliminary crop forecast for Brazil implied a shortfall of at least 5m bags for world supply in 2009-10 but cautioned that a more accurate picture would emerge once production estimates from other countries were published in the near future.
In New York, ICE March arabica coffee futures firmed 0.2 per cent at $1.1470 per pound following a drop of 17.7 per cent last year.
Global coffee consumption in calendar year 2008 is estimated at 128m bags, a rise of 2.4 per cent on the previous year and matching annual consumption growth since 2000, with little evidence of the global financial crisis affecting demand. Consumption could rise to more than 132m bags in 2009 and 134m bags in 2010 if future demand growth matches the historic average.
In London, Liffe March robusta coffee futures dipped 1.3 per cent to $1,643 a tonne following a fall of 7.8 per cent in 2008.
Oil prices staged a rebound on hopes of further government action to address the credit crisis after Ben Bernanke, chairman of the US Federal Reserve, said more capital injections and guarantees for financial institutions could be needed.
Nymex February West Texas Intermediate recovered from early weakness to rise $0.19 to $37.78, trading between a low of $36.10 and a high of $39.50. The March WTI contract traded $1.25 higher at $44.90.
The large spread which has developed between the February and March contracts has been attributed partly to expectations that oil companies will deliver more of the supplies that have been stored in offshore tankers to the US mainland now that the tax year end has passed. Crude oil in storage at Cushing, Oklahoma, the delivery point for WTI, has reached record levels and traders expect further deliveries from offshore tankers to be evident in the US weekly inventories data, due out today.
ICE February Brent rose $1.92 to $44.83 a barrel after touching a high of $45.59.
The rise for crude prices came in spite of the US government warning that a steeper fall for global oil consumption was likely this year. The Energy Information Administration revised its 2009 global demand forecast to a fall of 810,000 barrels a day, compared with its earlier projection for a decline of 610,000 b/d.
The EIA said that total US consumption fell 5.7 per cent in 2008 and that a further decline of 2 per cent was expected this year, with only a modest rebound of 0.8 per cent likely in 2010.
Published: January 13 2009 12:11 | Last updated: January 13 2009 19:26
A substantial fall in Brazilian coffee production this year looks likely to drag the global coffee market into a supply deficit in 2009-10, according to the International Coffee Organisation which released its latest monthly report on Monday.
The ICO said Brazil’scoffee production, which follows a biennial cycle (high output one year followed by low the next), could fall from 46m 60kg bags in 2008-09 to between 36.9m and 38.8m bags this year, a drop of 16 to 20 per cent.
The ICO said the preliminary crop forecast for Brazil implied a shortfall of at least 5m bags for world supply in 2009-10 but cautioned that a more accurate picture would emerge once production estimates from other countries were published in the near future.
In New York, ICE March arabica coffee futures firmed 0.2 per cent at $1.1470 per pound following a drop of 17.7 per cent last year.
Global coffee consumption in calendar year 2008 is estimated at 128m bags, a rise of 2.4 per cent on the previous year and matching annual consumption growth since 2000, with little evidence of the global financial crisis affecting demand. Consumption could rise to more than 132m bags in 2009 and 134m bags in 2010 if future demand growth matches the historic average.
In London, Liffe March robusta coffee futures dipped 1.3 per cent to $1,643 a tonne following a fall of 7.8 per cent in 2008.
Oil prices staged a rebound on hopes of further government action to address the credit crisis after Ben Bernanke, chairman of the US Federal Reserve, said more capital injections and guarantees for financial institutions could be needed.
Nymex February West Texas Intermediate recovered from early weakness to rise $0.19 to $37.78, trading between a low of $36.10 and a high of $39.50. The March WTI contract traded $1.25 higher at $44.90.
The large spread which has developed between the February and March contracts has been attributed partly to expectations that oil companies will deliver more of the supplies that have been stored in offshore tankers to the US mainland now that the tax year end has passed. Crude oil in storage at Cushing, Oklahoma, the delivery point for WTI, has reached record levels and traders expect further deliveries from offshore tankers to be evident in the US weekly inventories data, due out today.
ICE February Brent rose $1.92 to $44.83 a barrel after touching a high of $45.59.
The rise for crude prices came in spite of the US government warning that a steeper fall for global oil consumption was likely this year. The Energy Information Administration revised its 2009 global demand forecast to a fall of 810,000 barrels a day, compared with its earlier projection for a decline of 610,000 b/d.
The EIA said that total US consumption fell 5.7 per cent in 2008 and that a further decline of 2 per cent was expected this year, with only a modest rebound of 0.8 per cent likely in 2010.
