Favorable weather and flowering trees suggest good growing conditions for arabica in Brazil, the world’s largest coffee producer.
Timely rains in Brazil during the flowering season and a strong set in Vietnam resulting in a near record crop suggest a good year ahead. Rainfall in parched Brazil was 76% above average in October in Minas Gerais and Espirito Santo.
Coffee futures rose sharply this time last year but have gradually fallen from $1.76 per pound in November 2016 to between $1.20 and $1.30 per pound.
Prices “have drifted downwards since the end of August” according to the International Coffee Organization (ICO) averaging 120.01 cents a pound last month, a 17-month low according to ICO’s composite index. Price variance was 17.8% from a low of $1.13.
ICO estimates world consumption in 2016-17 at 1.19 million bags greater than production. The year ended in September with a 2.38 million bag surplus. “After increasing for two consecutive years, world coffee consumption is estimated to have remained stable,” the ICO said.
ICO’s robusta coffee index fared relatively well, in easing by 0.8% to 98.39 cents a pound.