A coffee analyst at a world trading house said, “Realistically, we are going to see unprecedented shortages that will continue into next year.”
The operators of robusta coffeewho in May saw how the prices reached maximum of 15 yearsfear that the bitter grain offer used to make instant coffee keep being limited until next year.
Brazilthe third largest exporter in the world, has already begun to collect its harvest of 2023/24and the operators had pinned their hopes on the country cover the deficit caused by the low supply from Asia. In this sense, the Brazilian group of coffee exporters, cecafeit keeps optimistic about the prospects of export and claims they should increase markedly in the second half of the year.
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However, operators and experts affirm that the robust offering are limited in Asia that even 3 million bags exported from Brazil -the upper limit of their forecasts- could not be enough to fill the gap. “If I had 5 million bags (of robusta exports from Brazil) could (see) a drop in prices, but realistically we are going to see a unprecedented shortage that will run into next year,” said a coffee analyst at a world trading house.
The shortage occurs when the main exporter, Vietnamvirtually ran out of stocks to ship this season, while the next crop from the second largest exporter, Indonesiabe disappointing. While, Brazil exports about half as robusta as Indonesia and one tenth that Vietnam.
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Indonesialike Brazilbegan to collect his harvest of 2023/24but production is expected to fall a twenty% year-on-year, according to Foreign Agricultural Service (FAS) of the United States Department of Agriculture (USDA). Although the FAS foresees a 5% increase Produced by Vietnam in the 2023/24 season, which runs from October to September, considers that the exports they will reach their lowest level in three yearswith only 27.5 million bags.
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Another factor driving robusta prices is the Increased demand of a bean that is cheaper than Arabica and can be replaced in blends, something roasters have been doing on a large scale as arabica prices have been high for two years in a row.
“When changing a mix, the change is not so easy. It occurs over a period of time. I think the consumption of Robusta is much higher than many assume,” says a European trader.
By Maytaal Angel.-
Source: Ambito
