The record-breaking production of coffee in Brazil managed to suspend the rally in the “Arabica coffee” market. The growth had reached 50%. Another factor suspending the growth was the expected increase in Columbia’s export.
Marex Spectron Group expects Brazil, the world’s number 1 in coffee production, to harvest 3.78M tons of coffee beans in 2012, thus exceeding this year’s harvest by 37%. The US producers also expect abundant harvests. Central America’s harvests are nearing those seen in 1999-2000.
Numerous analysts and commodity traders expect coffee to lose up to 13% of its price over the first 2 quarters of 2012.
Since June 2010 the prices on Arabica (the most popular coffee) have gained 50% as the result of poor harvests in Colombia and Brazil, which led to shorter supplies.
Ricardo Villanueva, President of Guatemala’s National Coffee Association, assumes that coffee prices will remain high till March-April 2012. That is why he says that it is better for coffee producers to start selling coffee right now.
According to the Department of Commodity Trading, , in near-term perspective coffee prices will start retracing against the current rally during the peak of new supplies from Columbia and Vietnam. However, later the rally will be resumed, as the prices will only stop growing in March-April 2012 during the next harvesting season in Brazil.
