Producers in Brazil are not likely to expand the frontiers of the world's largest coffee crop in the near term, despite the recent recovery of prices and profit margins, leaders in the sector said.
Front month London robusta futures hit a new 7-1/2-year high on Wednesday on tight supplies. World coffee stocks are expected to keep falling to new lows. And global demand for the caffeinated bean is expected to match supply this year and next when Brazil will put out a much smaller crop.
These factors have contributed to a return to profitability for the sector that began in 2005, after several years of hard times for growers due to low world prices and oversupply. In times of prosperity in the past, coffee producers have tended to expand planting in an attempt to capitalise on attractive prices.
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