UPDATE 2-Brazil will not face coffee shortage after drought, industry says
(Recasts with context, adds additional quotes)
By Gustavo Bonato
SAO PAULO, April 10 (Reuters) - Brazil has enough coffee stocks to supply exports and domestic demand this year even though a severe drought will result in a lower-than-expected harvest, the nation's coffee industry association Abic said on Thursday.
The association said its initial forecast for a crop of 47 million 60-kilogram bags may be further reduced when the extent of damage in the world's top producer becomes clearer.
Even so, "the harvest is going to be large enough to supply the domestic market and exports," Nathan Herszkowicz, executive director of Abic, said at an event in Sao Paulo.
The extent of the damage to crops is still not known and market participants have said a global surplus of almost 5 million bags will cushion some of the damage to supplies.
But the long dry spell or drought, which has almost doubled the price of arabica coffee in two months, is expected to hurt cherry growth and has coincided with a devastating leaf rust that has swept across Central American, hurting yields there.
Brazil grows roughly 40 percent of the world's arabica, which forms the backbone of most major commercial blends used in household names including Folgers.
Arabica coffee prices rose to their highest in more than two years on Thursday on rising concerns over the drought. Continuación...