USDA Estimates Upward Revision In Mexicos Coffee Exports In MY 2018/19

Coffee production in Mexico had been on a slow downward trend for a number of years due to adverse weather; however, the coffee rust fungus was the most critical factor. The coffee sector as well as the Mexican government designed and implemented the Integrated Program for Coffee (PIAC) with the overall objective to increase production and competitiveness. This program aims to develop certified nurseries to supply producers with quality disease-resistant plants, to renovate coffee plantations, and to provide maintenance and rehabilitation to the ones that are viable, and provide technological packages that guarantee sustainability of natural resources. The implementation of PIAC in 2016 helped increase production from a low of 2.2 million 60/kg bags in marketing year (MY) 2015/16 to 4.0 million bags in MY 2017/18. Due to investments destined to renovate coffee plantings in 2016 and specialized technical assistance, coffee production increased from a low of 2.2 million 60/kg bags in marketing year (MY) 2015/16 to 4.0 million bags in MY 2017/18.Coffee exports for MY 2018/19 are expected to grow as Mexico achieves it production goal, therefore the Post/New export forecast is 3.2 million 60/kg bags. However, this number is still tentative and will tend to change depending on final production and international prices. The United States continues to be the main international market for Mexican green coffee. Exports for MY 2017/18 are revised slightly upward from previous estimates as demand is strong and the sector is recuperating. Coffee exports for MY 2016/17 are revised upwards from previous estimates due to the efforts of growers to recuperate from coffee rust and a good international demand. The coffee sector believes exports were higher.

USDA expects MY 2018/1918 ending stocks to be slightly higher that MY 2017/18 estimates due to higher production expectations. However, the producers association report that it has been difficult to have a reliable system to record ending stocks, therefore, data is largely anecdotal from the sector. Producers believe most of the stock was used to cover domestic demand; therefore, ending stocks estimates for MY 2016/17 and MY 2017/18 are revised downward.