Supply deficit likely on global coffee market

There is a 2.8 million bag deficit on the global coffee market in 2015/16, says London-based commodities broker Marex Spectron in a report on Thursday. 

This would be the second year of deficit in a row. In 2014/15, a deficit of 5.2 million bags has been recorded. The global coffee production is set to grow by 4.3 million to 148.7 million bags. Increased production in Vietnam will play a major role to offset the gap. 

"Global coffee demand looks likely to rise by almost 2 million to 151.5 million bags. Although Marex Spectron expects 2016/17 to show a surplus, it says it is still too early to predict any concrete figures. The positive appraisal for 2016/17 is due to plants already blossoming in Brazil and Indonesia, which points to a good crop", says Commerzbank.