Robusta coffee prices are forecast to end the year below current levels but still register an annual increase of 28%, a Reuters poll of 10 traders and analysts showed.
Prices were expected to be $2,300 per metric tonne at the end of 2023, down 5% from Tuesday's close, but 28% above levels at the end of last year, according to the poll's median forecast.
Weather Forecast
Dry conditions linked to an El Nino weather event have raised concern over robusta coffee production in Asia, with crops in Indonesia particularly vulnerable, supporting prices.
"In (top robusta producer) Vietnam there is widespread irrigation ... However, Indonesian coffee is not irrigated and therefore it can be more susceptible to dry weather," said Rabobank analyst Carlos Mera.
Vietnam is expected to produce 29.6 million 60kg bags of coffee from the 2023/24 crop, the poll's median forecast showed, slightly below the previous season.
The US Department of Agriculture has put Vietnam's 2022/23 crop at 29.75 million bags.
Arabica coffee prices, meanwhile, were projected to end this year at $1.53 per pound, up 1% from Tuesday's close, but 8% below levels at the end of 2022.
Poll participants said that the combination of an expected increase in Brazilian output in the 2024/25 season and weak global demand could exert further downward pressure on arabica prices.
Brazil's Coffee Crop
Brazil's coffee crop in 2024/25 is expected to climb to 69.8 million bags, the median forecast showed, with several participants predicting more than 70 million bags.
The record crop in Brazil was 69.9 million bags in 2020/21, USDA data shows
"The arabica flowering in Brazil will be the most important fundamental soon. As we know, flowering is a crucial stage, and it will define the potential for 2024, which is expected to be higher," one poll participant said.
The median forecast for the 2023/24 crop was 67.3 million bags.
A small global surplus of 1 million bags is expected in 2023/24, compared with a global deficit of 3.7 million bags in 2022/23, the poll showed.
Read More: Coffee Traders Pin Hopes On Brazil For Robusta Beans As Prices Soar
News by Reuters, edited by Donna Ahern, Checkout. For more supply chain news, click here. Click subscribe to sign up for the Checkout print edition.
