[LINK] "Coffee Harvest in Indonesia to Tumble From Record on El Nino"

[rfmcdonald]

Bloomberg's Yoga Rusmana and Eko Listiyorini note that El Nino is set to hurt Indonesia's coffee crop.

Coffee production in Indonesia will probably drop 20 percent next year from a record as the strongest El Nino in almost two decades hurts crops in the world’s third-largest producer of robusta beans.

The harvest may slide to 560,000 metric tons in the year starting April 1 from 700,000 tons this year, according to the median of estimates from six traders and analysts compiled by Bloomberg. That would be the steepest decline since the 2006-07 season, according to U.S. Department of Agriculture data.

A smaller Indonesian crop will potentially widen a global deficit of the beans used by companies including used by Nestle SA, and support prices that slumped 20 percent last year. El Nino is largely responsible for the dryness in the fourth quarter of 2015 in Indonesia, according to Rabobank International. The weather event has hampered cocoa crops in Ivory Coast, curbed the monsoon in India and forced the Philippines to import more rice.

“Dryness in Indonesia is textbook El Nino,” Carlos Mera Arzeno, commodities analyst at Rabobank in London, said by e-mail Jan. 13. “We expect robusta prices to go up to above $1,580 a ton by mid 2016, as a double-whammy of a lower robusta crop in Brazil and in Indonesia hits the market from April onward,” he said.