Robusta Supply Concerns

Posted on: 2016-05-13 10:53 AM

 
The ICO's indicator price for robusta coffee jumped by 6.1%, to 92.06 cents a pound in April, while prices for mild arabica coffee in Colombia fell by 1.1% over the same period, to 157.06 cents a pound, with prices for other grades of arabica even more sharply down.
 
Stable arabica exports mask fall in robusta exports
 
But growing global exports mean coffee markets are "well supplied," despite the concerns over robusta production, the ICO said.
 
The ICO estimated global coffee exports up by 1.4% year on year in the first six months of the 2015-16 crop year, at 55.5m bags.
 
But the numbers mask a divergence in fortunes for arabica and robusta.
 
Between October and March, global arabica exports are estimated up 7.6%, at 35.8m bags.
 
The ICO noted "the highest increase recorded in Colombian milds, up 13.2%.
 
But the ICO saw global robusta coffee exports down 7.7% year on year, at 19.7m bags.
 
Total coffee exports were up 1.0% year on year in March, at 10.388 bags, the ICO said.
 
Exports of arabica coffee were up 3.0% year on year on March, with exports of Colombian milds up a whopping 29.9%.
 
Robusta exports, meanwhile, were down 2.0% in the same period.
 
Vietnam: waiting for rain
 
"Reports of drought in several robusta growing regions have spurred speculation over potential shortages," the ICO said.
 
Vietnam and Indonesia, the world's first and second ranked robusta growers, are seeing some dry weather.
 
With the rainfall season approaching in Vietnam, all eyes are monitoring whether there is sufficient rainfall to quell doubts.
 
The country's Meteorology and Hydrology Department has forecast 20-40% lower rainfall in the main producing areas of the South and the Central Highlands, in a May 1 statement.
 
Meanwhile current rainfall has been scattered and this will lend little support to production, "so drought and water conditions won't improve much".