World coffee growers warned not to raise production

New Delhi.– Coffee-growing nations risk killing a nascent price recovery should they boost production to take advantage of a fall in Brazilian output, a top industry executive has warned.

Brazil expects production to fall by eight to 10 million bags from last year's 41.5 million bags – at least 20 percent – when it harvests the next crop in April-May, said Nestor Osorio, executive director of the International Coffee Organisation.

"The market is going to be short of coffee because stocks are already at the lowest point in history," Osorio told AFP in Bangalore, where he attended the three-day Indian Coffee Festival ending Sunday.

The Colombian-born official forecast production for the next crop year at 110 million bags, each weighing 60 kilos (132 pounds), and demand at about 120 million bags, a deficit he said will likely extend the recovery after a crisis that started in 2000 when coffee prices fell below production cost.

"We are at a turning point at which the days of crisis are over," Osorio said. "The recovery of prices should continue.

"But a lot remains to be done and producers have to be cautious, not to think that the present situation could lead to more production," he added.

"The name of the game should be value, not volume."

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