Colombia Will Produce 10 Million Bags of Coffee in 2011-12

Sept. 28 (Bloomberg) — Colombian coffee production will rise to 10 million bags in the season starting next month after rains cut output in the past three seasons, according to the country’s Coffee Growers’ Federation.

The crop in the 2010-11 season is expected to be 8.6 million to 8.7 million bags, said Luis Munoz, chief executive officer of the Colombian Coffee Growers Federation. Each bag contains 60 kilograms (132 pounds) of beans. Production in the three previous seasons was smaller than the 12.5 million bags in 2007-08, data from the International Coffee Organization showed.

“If weather is normal, without El Nino or La Nina, Colombia’s production will easily reach 10 million bags,” Munoz said in an interview at the ICO offices in London today.

El Nino is a weather pattern of warm ocean temperatures in the Equatorial Pacific and La Nina is chracterized by cold temperatures in the area.

The coffee crop in the Andean nation will have fully recovered from the shortfalls by the 2012-13 season, Munoz said. Colombia plans to increase output to 14 million bags by 2015 through a replanting program to increase the yield, he said.

“We have replanted 80,000 hectares (197,684 acres) so far this year, 30,000 more than in the same period last year,” he said. “We have projected to reach 120,000 hectares by the end of this year,” he said, adding that the program would continue over the next four years.

Investments are also being made in training farmers, increasing the use of fertilizers and planting trees that are more resistant to climate change, he said.

$2 a Pound

Coffee prices are likely to remain above $2 a pound on ICE Futures U.S. as supplies remain tight, Munoz said, adding that supplies will be limited during the next five or six years as consumption rises.

“What we see in the fundamentals lead us to conclude that the market in New York has a new floor of $2 a pound,” he said. “While the market is still tight, there will be volatility.”

Consumption in Colombia grew about 1 percent in 2010 after 20 years of stability or even slowing usage, he said. The country plans to increase domestic demand by 30 percent in the next five years, he said.

Colombia is also focusing on sustainability, and 110,000 growers have some kind of certification label, Munoz said. That’s about 25 percent of the country’s growers and compares with only 4,000 certified producers five years ago, he said.

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