Coffee consumption worldwide in 2021/22 is expected to grow and surpass coffee production for the season, causing a reduction on global ending-stocks, the U.S. Department of Agriculture (USDA) said in a report on Monday, Reuters reports.
According to the report ‘Coffee: World Markets and Trade,’ the USDA predicts coffee consumption increasing by 1.8 million 60-kg bags in 2021/22 from the previous season to 165 million bags, while production is seen falling 11 million bags to 164.8 million bags.
The report said inventories at the end of the season will fall to 32 million bags, the lowest since 2017.
The main reason for the production shortfall, as it is known in the market, is the decrease in Brazilian production due to the off-year in arabica’s cycle and drier-than-normal weather.
The USDA sees Brazil’s 2021/22 crop at 56.3 million bags from 69.9 million bags in the previous season.
It sees Brazilian domestic market demand rising to a record 23.7 million bags, which will drive exports down 9 million bags to 32 million bags.
Ending stocks in Brazil are projected to shrink to only 1.5 million bags.
The U.S. agency sees output in the world’s number 2 producer Vietnam increasing to 30.8 million bags (up 1.8 million) in 2021/22, while number 3 producer Colombia will have a slightly smaller crop at 14.1 million bags (down 200,000 bags).
Output from Central America and Mexico is forecast down by 400,000 bags to 17.4 million “as slight gains in Guatemala, Nicaragua and Mexico are more than offset by Honduras, which is forecast to drop 700,000 bags to 5.5 million.”