Coffee Blight

CentAm coffee blight to cut 2013-14 output only 9.7 pct -ICAFE

Central American 2013/14 coffee output to drop 1.2 mln bags -ICAFE

* Benchmark coffee price seen below cost of production

By Marcy Nicholson

NEW YORK, Dec 3 (Reuters) - A leaf rust outbreak will cut Central American coffee production by 9.7 percent in 2013/14, a spokesman for Costa Rica's national coffee institute Icafe said on Tuesday, a fraction of the loss previously expected from the blight.

Ronald Peters, Icafe executive director, said on a National Coffee Association of America webinar that Central American coffee production will fall roughly 1.2 million 60-bags, or 9.7 percent, from the 2012/13 crop year (October/September), bringing production to roughly 11.2 million 60-kg bags.

This lower coffee production forecast for Central America, where an outbreak of a leaf rust fungus known as "roya" is hampering the harvest currently underway, follows sharply reduced output in 2012/13, when it dropped by roughly 20 percent because of the air-borne fungus.

Central America produces roughly 10 percent of the world's coffee and grows a typically high-quality arabica bean in its high altitudes and volcanic soil.

The International Coffee Organization said in its October newsletter that the damage from leaf rust in Central America was expected to be more significant than the loss of 2.7 million bags of coffee in 2012/13.

Despite lower Central American production, a global abundance of beans due to large harvests in top overall coffee grower Brazil, the world's biggest robusta producer Vietnam and the largest grower of washed-arabica Colombia, has pushed the benchmark price to a five-year low.

"The cost (of production) is higher than the actual "C" contract price," said Juan Barrios, a board member of Guatemala's coffee association Anacafe, also speaking on the webinar.

Roya first reached Central America in 1976 but slashed 2012/13 output after rising to higher altitudes than ever before, infecting farms where producers were not accustomed to dealing with the disease. The fungus attacks the underside of coffee tree leaves, appearing as powdery orange spores, and ultimately turning them black and causing them to drop. This either kills or significantly weakens the tree, cutting yields and potentially affecting bean quality.

Farmers have tried to combat the outbreak, the region's worst ever, with fungicides, pruning and cutting down severely infected trees. The improved forecast shows that many of these measures have been successful.

In mid-November, Guatemala's National Association of Coffee forecast its output will drop by 3 percent to 2.9 million 60-kg bags, after a 15 percent slide in 2012/13. Icafe projected Costa Rica's 2013/14 output would drop by 18 percent year over year. El Salvador was seen dropping by 36 percent

Thank you to Mark Ormsbee for the Article