The arabica market is set to shift in 2017-18 to a significant deficit from the prior season’s surplus, a trend not reflected in current futures prices, Marex Spectron said on Tuesday.

“Today’s futures price is a fair reflection of today’s 2016-17 arabica surplus, but underprices the 2017-18 overall deficit and contains no weather premium for 2018-19,” the broker said in its June market report.

Arabica coffee futures on ICE fell to a 16-month low last week of $1.155 per lb, representing a decline of around 17 per cent since the start of the year. Marex forecast an overall global deficit (arabica and robusta) of 4.4 million 60-kg bags in 2017-18, compared with a surplus of 0.9 million in 2016-17.

Global production was forecast to fall to 152.4 million bags, from the prior season’s 155.5 million, mainly reflecting a decline in Brazil’s crop.

“The early harvest is not always a fair reflection of the overall harvest, but there is talk of fewer large beans in arabica areas,” Marex said, forecasting a decline in total Brazilian production to 50 million bags from 55.8 million.