Brazil expects lower arabica coffee production in 2014

Brazil's arabica coffee output should drop between two and eight percent this year compared with 2013, hobbled by falling prices on world markets, the country's crop forecasting agency said Thursday.

Conab forecast an arabica harvest of between 35.08 million and 37.53 million bags.

"This fall is due to a reduction of planting areas resulting from lower prices paid to producers and bad weather conditions such as frost which reached the southern state of Parana in 2013, " it noted in a statement.

Arabica prices sank 24 percent on commodity markets last year, after plummeting 35 percent in 2012.

Hurt by oversupply, arabica even hit its lowest level in seven years in early November.

With land lease and salaries skyrocketing, production costs regularly exceed prices paid to coffee producers.

But the robust harvest, which represents 25 percent of the coffee produced in Brazil -- the world's biggest producer and exporter -- is expected to total between 11.5 and 12.6 million bags, up between five and 16 percent over 2013, Conab said.

It said the country's total coffee production this year should reach between 46.53 and 50.15 million bags, or between 5.4 percent less and two percent more than in 2013.

Brazil currently has 1.96 million hectares (4.8 million acres) of coffee plantations , three percent less than in 2013.