Coffee stocks in Brazil rose to a seven-year high earlier this year, the government said, the latest sign that farmers in the world's largest producer have stockpiled beans after the worst drought in decades raised concerns about supplies. Brazil had 15.2 million bags of private coffee stocks as of March 31, up 9.2 percent from the 13.9 million bags a year earlier, crop supply agency Conab said in a report published online this week.
The government also has 1.65 million bags in public stocks. Private stocks were the highest they have been since 2007, when Brazil, which exports some 30 percent of the world's coffee, had 17.58 million bags on hand. The bulk of the stocks as of March 31, or 6 million bags, are in the hands of farming co-operatives, Conab said, while some 3 million bags are being held by exporters. The vast majority, or 14.16 million bags, was arabica variety while 1.05 million bags were Conilon, the local variety of robusta, Conab said in a report.
Three quarters of supplies were in Minas Gerais, Brazil's top coffee producing state. Conab's report said the larger stocks would have a "fundamental role" in balancing supply and demand in the global market. Concerns over the drought drove arabica prices to a two-year high in April. They later eased by 25 percent but touched a four-week high on Friday amid new concerns over the drought's affect on the 2015 coffee crop. Brazil's Agriculture Ministry forecast a 2014 crop of 44.57 million bags to account for the drought in May, down 9 percent from a year earlier. Private analysts expect the 2015 crop to be even lower.