As predicted by the Analytics Team of Commodity Trading Department of , price for Arabica kept falling and currently ranges between $160.25 – 166.6 per pound. We have previously informed that June forecast of USDA concerning coffee price is bearish; therefore, current yield, as well as the future one, may fall down in price.
This forecast has not been the only reason for the price drop. It has already been informed that the start of harvesting campaign in Brazil has been worsened by downpour, which has resulted into fear concerning possible spoiling and harvest failure. For 10 days the price has been attempting to break the high of $190 per pound. When it became clear that rains have had slight impact on yield in terms of quantity and quality, the price dropped. Despite delayed supplies of coffee from Brazil export and stocks are currently growing quicker than last year.
For example, in July export from Central America, Mexico, Columbia, Peru, and Dominican Republic has risen by 49.6 percent in comparison to last year, having reached 2.9 million of 60-kg bags per month. In general, certified stocks of new yield of coffee as of August 20, 2012 that amount to1.858 mln. bags is the highest quantity since September 2010. Conab still holds the view that this year Brazil will harvest 50.45 mln. bags of coffee.
In this reference it is worth paying attention to the fact that despite the record yield of Robusta, its price remains rather stable (ranging at about $2000 per ton, which is about 1.5 times cheaper than Arabica). In addition,due to crisis there are no rapidly growing coffee markets, as it used to be several years ago when coffee consumption was growing in India, China, Eastern Europe, and Brazil itself. Therefore, it is logical that a number of consumers are switching to cheaper Robusta.
Price for Arabica may remain at about 160, but the pattern at the chart seems to be final. There is, though, a reserve for the price reduction of Arabica, but, on the other hand, prices usually start growing in August. Downpour has broken the set schedule. Consequently, we are following the news and looking for the point of a price rise at ВСА.
