Rabobank Cuts Global Coffee Demand Est. by 1M Bags on Virus

By Manisha Jha

The demand estimate for the 2019-20 season was lowered to 163.9m bags due to large increases in unemployment and the impact from coronavirus lockdowns, the bank said in a report.
The 2019-20 surplus est. was raised to 2.6m bags versus 1.6m bags
2020-21 oversupply forecast raised to 7.6m bags from 5.6m bags
“The demand side looks more precarious now than in our last report,” Rabobank analyst Carlos Mera said
In the U.S., “lower out-of-home sales are likely to continue under distancing protocols that may remain in place for the remainder of 2020”
Bank does not foresee any disruptions to Brazil’s harvest currently underway with the exception of potential delays at farms and ports
On the supply side, “the key risk continues to be a disruption in the Brazilian harvest which will coincide with the projected peak in infections in Brazil, but in our basic scenario we assume a full harvest will take place”
“As far as we can tell, there is no labor shortage for the time being, though the peak of the harvest will be in June/July”
The Vietnam output estimate was cut by 0.5m bags to 29.4m bags in 2020-21 on dry weather
READ: Rabobank Cuts Coffee Demand Growth to 0.4% in 2020 on Virus