Coffee shortage looms two years from now

A world coffee shortage is looming two years from now as yields from Brazilian trees dwindle and a global surplus in 2006-07 fails to replenish stockpiles in producer countries, commodity analysts F.O. Licht forecast.

“In 2007-08, stocks could be at a critically low level,” F.O. Licht Man- aging Director Helmut Ahlfeld said Fri-day in a telephone interview from its head office in Ratzeburg, Germany.
Costs have risen for producers in Brazil, the world’s biggest grower and exporter of coffee, while the strengthening real has hurt earnings. The Brazilian currency has gained 53 percent versus the dollar since the beginning of 2003.
“This makes it difficult to embark on renewing billions of trees, which are now beginning to age and are past their prime,” F.O. Licht said in a report today. “Without replanting, yields will begin to slip back in the years to come.”
Yields from Brazilian trees will naturally fall in 2007-08 after a big harvest the previous year. Abundant coffee crops are typically followed by smaller ones as the trees require about one year to recover.

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