Brazil’s coffee output will reach 44.7 million bags in 2015 according to a forecast released by Citi Research, a unit of Citigroup Global Markets Inc.
Market deficit could grow to more than 10 million bags by 2016 said the New York-based analyst said in a report issued on Monday.
This is expected to drive prices to a three-year high in 2015. Citi Research expects this to continue with prices rising to $2.15 per pound in the first quarter of 2015 and $2.40 by end-2015.
Recent estimates for Brazil’s coffee harvest range between 40 and 53 million bags.
According to a research note issued by Rabobank, global output for the current 2014/15 (October to September) coffee year will reach 144.4 million 60-kg bags.
The Dutch lender’s forecast for Brazil’s 2015/16 crop is between 42 million to 47 million bags.
Arabica coffee futures inched slightly higher on Wednesday. The active contract for March delivery settled 25 points higher at 183.65 cents a pound.
