(Ecofin Agency) - The Dutch banking group Rabobank forecasts a global coffee surplus of 3.2 million bean bags, down 900, 000 from initial expectations (4.1 million bags) for the 2018-19 season. This was revealed in the bank’s quarterly coffee outlook report published last week.

According to Rabobank which specified that this surplus will entirely be the Arabica coffee variety, this surplus cut is due to lower production forecasted for Brazil, the world’s leading coffee producer. The latter would produce only 58.8 million bags from the 59 million bags expected.

“With Brazil’s internal demand expected to keep shifting towards Robusta, a large Arabica exportable surplus is expected to put pressure on the market in the short term,”Rabobank indicated.

In addition to trend for 2018-19, Rabobank forecasted a global deficit of 2.6 million bags during the current season (2017-18), which include 2.1 million bags of Robusta and 500, 000 bags of Arabica.

Lower outputs are also forecasted for 2017-18 season in Indonesia, Uganda and Papua New Guinea while Ethiopia and Nicaragua are expected to increase production.

Espoir Olodo