Arabica And Robusta Coffee Prices To Climb By End Of 2021

By Dave Simpson
Arabica And Robusta Coffee Prices To Climb By End Of 2021

Arabica coffee prices will end the year 13% above current levels at nearly $2 per lb - just below a recent near seven-year peak - following freak frosts and a drought in top producer Brazil, a Reuters poll of 11 traders and analysts has shown.

Arabica Coffee

ICE arabica will reach $1.9850 per pound by the end of 2021, representing a surge of 55% from levels seen at the end of last year, based on the median forecast of survey participants.

"Frost was just the opening band. The main act will be timely rains. With a large chance La Nina returns, 'normal weather' is far from certain," a Europe-based trader at a major coffee merchant said.

Arabica prices have gained some 35% in the year to date, reaching seven-year peaks above $2 per lb last month after the worst frosts in nearly 30 years hit an estimated 11% of Brazil's arabica growing region.

The frosts are expected to have damaged production for the next two seasons, and were preceded by the worst drought in 90 years, which is also expected to have damaged next season's crop.


Poll participants expect Brazil will produce a crop of just 64.12 million 60 kg bags in the 2022/23 season, an 'on-year' in its biennial crop cycle, down from an International Coffee Organization's estimate of 69 million bags in 2020/21, the previous 'on-year'.

They see Brazil producing a crop of 54.20 million bags in the 2021/22 'off-year', leaving the global arabica market with a deficit of 8.8 million bags compared with an expected 6.9 million bags surplus in 2020/21.

Robusta Coffee

Prices of robusta coffee, primarily used for instant coffee or added to arabica blends as a cheaper ingredient, are seen ending the year at $1,983 a tonne, 43.1% higher than the market close at the end of 2020.

Poll participants expect the global robusta market to flip into a deficit of 150,000 bags in the 2021/22 season as demand increases due to lower supply of arabica. The deficit follows a forecast surplus of 200,000 bags in 2020/21.

Production in Vietnam, the world's top robusta producer, is forecast up at 30.50 million bags in 2021/22 versus 28.60 million bags in 2020/21.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.