Fundamental Notes

On March 4, 2007, the Ivory Coast government and rebel forces agreed to form a new government and the national election is now expected to occur by December of 2009. The country has been divided since 2002 and it has been hard to reconcile the two sides since then. The other threats to the world's cocoa crop are primarily from weather, the swollen shoot virus, and black pod disease. On May 1, 2009, Nestle announced that it will help farmers in West Africa plant one million new disease-resistant cocoa trees each year for the next ten years. The Ivory Coast and Ghana account for over one-half of the world's cocoa production.

Obtaining recent data on world cocoa statistics is difficult. On May 27, 2009, the International Cocoa Organization (ICCO) predicted that world cocoa production will fall short of demand by 84,000 tons in 2008-2009, a smaller deficit than expected two months earlier. 2008-2009 ending stocks are expected to be roughly 42% of annual use. For 2009-2010, the ICCO expects a world production surplus of 150,000 tons.

On May 6, 2009, Fortis Bank predicted that the world would produce 3.48 million tons of cocoa in 2008-2009 and consume the same amount. For 2009-2010, they expect world production of 3.60 million tons to fall short of consumption by 64,000 tons.

In the first quarter of 2009, Europe's cocoa grind was down 11% from a year ago. In North America, the first-quarter grind was down 13% from a year ago.

World Cocoa Market Estimates (in million metric tons)
Year ending September 30,	2002	2003	2004	2005	2006	2007	2008	2009	2010
Net Production	2.87	3.17	3.54	3.39	3.72	3.35	3.70e	3.48e
Grindings	2.89	3.08	3.24	3.35	3.49	3.65	3.76e	3.68e
Ending Stocks	1.34	1.41	1.68	1.69	1.88	1.57	1.56e	1.47e
Stocks/Use Ratio	.46	.46	.52	.50	.54	.43	.41e	.42e

Fundamental Notes

On December 5, 2008, the USDA changed the way that it records world ending stocks. Historically, they only tracked ending stocks in producing countries, but now they include ending stocks in all countries. It is a welcome change and long overdue, but it makes it more difficult to compare recent data with previous years.

On June 12, 2009, the USDA estimated 2009-2010 world coffee production at 127.4 million (60 kg) bags with implied use of 132.2 million bags. That puts 2009-2010 ending coffee stocks at 35.3 million bags, or 27% of annual use which is historically on the low end. In producing countries, the USDA said that 2010 ending stocks will fall to 13 million bags which would represent nearly the lowest ending stocks to use ratio of the past three decades or more. They also expect Brazil to produce 43.5 million bags in 2009-2010, down from 51.5 million bags the previous year. On January 8th, Brazil's government estimated the upcoming 2009 crop at 37.8 million bags.

In its May report, the International Coffee Organization (ICO) reduced its estimate of 2008-2009 world coffee production to "around 126 million bags." The ICO estimated 2008 world consumption at 128 million bags and, on March 20th, the Director estimated 2009 consumption at 129.6 million bags. Like most analysts, the ICO expects less world production in 2009-2010, due to Brazil's biennial production cycle.

USDA World Coffee Market Statistics (in million 60-kg. bags) - Based on June, 2008 USDA estimates and does not include ending stocks in non-producing countries.
Year ending Sept. 30,	2002	2003	2004	2005	2006	2007	2008	2009	2010
Production	111.5	127.8	110.3	120.8	111.7e	133.5e	122.4e	140.6e
Total Use	114.4	120.9	117.3	118.6	115.8e	132.2e	129.2e	135.8e
Ending Stocks	19.7	26.5	19.5	22.0	17.9e	19.2e	12.4e	17.2e	13.0e
Stocks to Use ratio	.17	.20	.17	.19	.16e	.15e	.10e	.13e

USDA World Coffee Market Statistics (in million 60-kg. bags) - Based on June, 2009 USDA estimates and includes ending stocks in non-producing countries.
Year ending Sept. 30,	2005	2006	2007	2008	2009	2010
Production	122.6	117.0	133.5	122.8e	134.8e	127.4e
Implied Use	118.6e	124.3e	129.2e	128.0e	132.4e	132.2e
Ending Stocks	46.0	38.6e	42.8e	37.7e	40.1e	35.3e
Stocks to Use ratio	.38e	.31e	.33e	.29e	.30e	.27e
Billions of bearing trees in Brazil	5.26	5.33	5.73	5.72	5.89	5.73
USDA Brazil coffee map

Fundamental Notes

On May 21, 2009, the USDA said that 2009-2010 world sugar production will total 159.9 million tons up from 148.7 million tons the previous year. Sugar stocks at the end of 2009-2010 are expected to be down 761,000 tons to 31.2 million tons, or 19% of annual use. If true, that will be the lowest stocks to use ratio in 16 years. On May 5, 2009, the USDA said that they expect Brazil to produce 36.8 million tons of sugar in 2009-2010 and 28.4 billion liters of ethanol, up from 32.4 million tons of sugar and 26.8 billion liters of ethanol in 2008-2009. Beware: the USDA commonly revises its world sugar data as far back as four years or more.

On May 15, 2009, the International Sugar Organization (ISO) predicted that the world production will fall short of consumption by 7.8 million tons in 2008-2009 and by 4.75 million tons in 2009-2010. On May 28, 2008, the private firm, Czarnikow, was quoted as saying that 10 cents a pound is "well below production costs."

World Sugar Market Statistics (in million metric tons)
Year ending Sept. 30,	2002	2003	2004	2005	2006	2007	2008	2009	2010
Production	134.3	148.5	142.4	140.7	144.9	164.5	166.5e	148.7e	159.9e
Implied Total Use	133.3	144.3	144.4	145.6	147.5	156.2	164.8e	157.8e	160.7e
Ending Stocks	36.6	40.5	38.5	33.7	31.1	39.4	41.1e	32.0e	31.2e
Stocks to use ratio	.27	.28	.27	.23	.21	.25	.25e	.20e	.19e
Brazil sugarcane map

Fundamental Notes

On June 10, 2009, the USDA increased its estimate of the 2008-2009 Florida orange crop from 158 to 160 million boxes, down from 170 million boxes the previous year. The projected juice yield was increased from 1.65 to 1.66 gallons per box at 42.0 degrees Brix, down from last year's record high of 1.67 gallons per box.

On September 19, 2008, the USDA said that Florida had 496,518 acres of commercial orange groves, the second lowest since records began in 1966. On June 25, 2009, a vice president of Florida Citrus Mutual said that Florida's annual production could fall to 140 million boxes in three to five years due to citrus greening disease. On May 29, 2009, the USDA said that there would be 650 million (sse) gallons of orange juice stocks at the end of 2008-2009, or 62% of the year's production. As of May 31, 2009, there were 1.45 billion pounds of frozen orange juice in U.S. cold storage, up .6% from a year ago.

Brazil, the world's largest producer of orange juice, has potential problems on the horizon. Brazil has lost over two million trees to sudden citrus disease and orange farmers are also concerned about an outbreak of citrus greening disease. There is no cure to this disease, it is fatal to the trees, and it may have already spread the country. In addition to threats from nature, on January 9, 2006, the U.S. began charging Brazilian exporters a 15% tariff (or more, depending on the exporter's cooperation) for "dumping" orange juice in the U.S. In February of 2009, the USDA said that it expects Brazil to produce 1.24 million tons of orange juice in 2008-2009, up 6% from the previous year. In 2008, Brazil's exports of frozen orange juice concentrate were down 8% from a year ago.

World Orange Juice Market Statistics (in million boxes)
Year ending September 30,	2002	2003	2004	2005	2006	2007	2008	2009	2010
Production	223	230	203	150	148	129	170e	160e
Brazil citrus map