The world’s favourite beverage, coffee, is expected to head for further price rise this year as global supply trails demand for the third year. ED&F Man has estimated there could be a 3.8 million bag shortage for the next season, with Robusta beans headed for a big shortfall. The report from ED&F Man, one of the world’s leading coffee merchants, also expects prices to be tight especially within the period from August 2023 to 2024.

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Arabica coffee prices are trading at a near four-month high of $1.78 per pound. The variety is seen in short supply globally as Brazil looks at less-than-expected crops and a delayed harvest due to erratic weather. There have been reports of blossom issues in key areas of Brazil’s Minas Gerais state, the world’s biggest Arabica-producing region.

Arabica coffee prices gained 6 percent in the week, while Robusta jumped 3 percent during the same time.

The street is also looking at the decline in stocks at the Intercontinental Exchange (ICE), which the global markets treat as the reference price. The stocks have fallen 30,000 bags in the past eight days leading to a rise in speculative positions.

ICE coffee stocks:

India coffee board also revised the 2022-23 coffee crop size down by 8.36 percent to 3.6 lakh tonnes, though it is still higher than the 2021-22 crop of 3.42 lakh tonnes.

While Robusta is used for instant coffee and as a blend in espresso, Arabica is the bean favoured by Starbucks and other coffee chains and cafes.

Also Read: A look at the most expensive coffees in the world

First Published:Feb 19, 2023 11:03 AM IST