São Paulo – Brazil’s Coffee Exporters Council (Cecafé) said on Tuesday that in 2005 the country should export around 23 million 60-kilogram bags of the commodity.
Of this total 18.09 million bags should be arabica coffee, 1.6 million bags robusta coffee and 3.31 million bags soluble coffee.
If this forecast proves correct it will mean 3.44 million bags less (or -13%) than the 26.44 million bags shipped in 2004.
In terms of export revenue Cecafé forecasts $2.361 billion in 2005, up 17% on the $2.02 billion of 2004. Prices are expected to rise in 2005, possibly by as much as 30%, as supply grows tighter in relation to global demand.
Cecafé general director Guilherme Braga said that the lower volume shipped will be due to the smaller Brazilian crop forecast for this year.
If a lower volume is exported it means Brazil could lose 3 percentage points of its share of the global market in 2005, according to Braga, to 26.5% from 29.3% in 2004.
Other countries are expected to fill in the space, especially producers of “other smooth coffees”, such as Central America.
Braga also said that the Brazilian currency’s medium R$ 2.95 rate against the dollar in 2004 is expected to strengthen to R$ 2.85 in 2005. He explained the real’s gains in 2004 only did not have a stronger impact on the coffee industry because international prices of the commodity rose.
He warned that if the R$ 2.85 level holds true for 2005, higher prices will be unable to prevent losses to producers’ income caused by higher production costs (particularly the import of inputs such as fertilizers and pesticides).
Source: Agencia Estado