Arabica coffee prices are forecast to post an annual drop of 12% in 2023, with a large crop in top producer Brazil expected to lead to a global coffee surplus in the 2023/24 season, a Reuters poll of 10 traders and analysts has shown.
Prices were seen ending 2023 at $1.48 (€1.38) per lb, down 15% from Friday's close and 12% lower than levels seen at the end of 2022, according to the poll's median forecast.
Robusta coffee prices were seen ending 2023 at $1,900 per tonne (€1,770), down 6% from Friday's close but 6% above levels at the end of 2022.
Production In Brazil
Poll participants said the size of Brazil's 2023/34 production would play a key role in determining prices with some uncertainty about whether the huge crop that had initially been expected will actually be harvested.
Brazil's coffee crop in 2023/24 was forecast to climb to 67.1 million 60 kg bags, up from a median estimate of 61.5 million bags for the 2022/23 crop.
The median forecast was, however, below the consensus of 71 million bags in a Reuters poll issued in July 2022 with the crop not developing as well as expected possibly because the trees were not healthy enough after a very dry winter in Brazil.
Vietnam Crop Up
Top robusta producer Vietnam was forecast to have a crop of 31 million bags in 2023/24, up from 30 million in 2022/23.
Larger crops in Brazil and Vietnam were seen leading to a global surplus of 3.35 million bags in 2023/24 compared with a deficit of 4.15 million in 2022/23, according to the poll's median forecasts.
Poll participants also cited the potential for curtailed demand - due to high retail prices and a global economic downturn - as a factor in the bearish outlook for prices.
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