"Global coffee production in 2010/11 seems set to reach an all-time high...This is largely due to a new record output in top producer Brazil while Vietnam's recently started harvest also seems poised for a rise," Licht said, issuing its first forecast for the 2010/11 crop.

Licht saw top grower Brazil's coffee crop rising to 54.70 million bags from 44.80 million, while number two producer Vietnam was seen harvesting 19.68 million versus 18.65 million.

Brazil's coffee output rises and falls from one year to the next in a biennial cycle. The 2010/11 crop was a higher output year and the next harvest, due to begin in May 2011, will be smaller, though no official estimate has been given yet.

Licht noted that arabica futures in New York were still holding above the psychological $2.00 per lb threshold despite Brazil's record pace of exports from the 2010/11 crop.

"While some are blasting sinister speculators for what they deem as inflated price levels, such a perception widely ignores market fundamentals," Licht said.

"Brazil's beans are eagerly absorbed by roasters across the globe to offset the significant drop in Colombian and Central American supplies experienced over the last two years, with no quick recovery to previous levels in these countries in sight."

Licht said it was doubtful whether the recovery in global output this year would be sufficient to build up stocks to the extent that would be necessary to carry the market through the 2011/12 "off-year" in Brazil.

Given that global stocks have fallen to very low levels and that consumption has continued to rise throughout the economic crisis, the market may become tight again sooner rather than later," the analyst said.