Brazil's 2008 Coffee Crop May Slump

Brazil's 2008 Coffee Crop May Slump, Osorio Forecasts (Update3)

By Claire Leow

Dec. 5 (Bloomberg) -- The coffee crop in Brazil, the world's largest producer of the bean, may slump by as much as 20 percent in 2008 because of dry weather, the head of the International Coffee Organization says.

"Brazil enters now into a year of low production," Nestor Osorio, the group's executive director, said today. ``There have been problems with the weather and the rains. One thing is for sure: It will be lower than 40 million bags. It will be a tight situation with the market.''

The prices of coffee, which is traded in millions of 60- kilogram bags, have been rising on surging global demand. Arabica beans have gained 16 percent this year, while bitter- tasting Robusta beans have jumped 20 percent. Global coffee output varies between 105 million and 120 million bags a year.

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