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Supply Chain

Coffee Prices Seen Falling Ahead Of Bumper Brazil Crop

Arabica coffee prices are forecast to end this year well below current levels and post an annual loss of 20% with the prospect of a larger Brazil crop next year weighing on prices towards the end of the year, a Reuters poll of 12 traders and analysts showed.

Prices were seen ending 2022 at $1.80 per lb, 20% lower than levels seen at the end of 2021, according to the poll's median forecast.

Robusta coffee prices were seen ending 2022 at $1,900 per tonne, 20% below levels at the end of 2021.

Poll participants cited the prospect of a larger Brazilian crop next year as weighing on prices, particularly in the final quarter of this year.

Brazil's coffee crop in 2023/24 was forecast to climb to 71 million bags, up from a median estimate of 63 million bags for the 2022/23 crop.

Frosts and drought last year, which damaged this year's coffee production in Brazil, are expected to cause an inversion in the country's biennial crop cycle.

Coffee Output

Arabica coffee trees alternate years of higher and lower production, a natural development as trees get stressed after high fruit loads and produce less in the following season.

The 2022/23 crop should have been an 'on-year' in the cycle while next year should be an 'off-year' but that pattern is set to be reversed with a larger crop in 2023/24.

Top robusta producer Vietnam was forecast to have a crop of 30 million bags in 2022/23, slightly below the prior season.

The US Department of Agriculture has put Vietnam's 2021/22 crop at 31.6 million bags.

A marginal global coffee deficit of 0.8 million bags is expected in 2022/23, compared with a global deficit of 8.4 million bags in 2021/22, according to the poll's median forecast.

News by Reuters, edited by ESM. For more supply chain news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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