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Global coffee prices will likely ease further in 2024 on a projected increase in supplies from key producing countries such as Brazil, Vietnam, and Colombia, according to the World Bank’s commodity markets outlook.
Prices of Arabica coffee declined by 14 per cent during the third quarter of 2023 over the previous quarter. Following this decline, Arabica prices are down by about 30 per cent compared with the year ago period. They are expected to ease going into 2024 as production is likely to increase by around 14 per cent during the upcoming 2023–24 season in Brazil and Colombia, the World Bank said in its latest Commodity Markets Outlook, October 2023. Brazil and Colombia account for about 60 per cent of the global output of Arabica coffee.
Robusta prices, on the other hand, gained marginally by some 2 per cent during the September quarter. Robusta prices are currently over 17 per cent higher than the year-ago period. “The robusta market is expected to remain tight as a decline in Indonesia and Uganda production of around 2.1 million bags outweighs the increase in Vietnam’s output of 1.4 million bags,” the Bank said. Vietnam, Indonesia, and Uganda account for more than two-thirds of global robusta production.
El Nino risk
“Following an estimated decline of more than 20 per cent during 2023, arabica prices are expected to soften marginally in 2024 and remain broadly stable in 2025. In contrast, robusta prices are expected to decline nearly 8 per cent in 2024, followed by a small decrease in 2025 after gaining almost 14 per cent in 2023. The intensification of El Niño and a more severe downturn of the global economy present key upside and downside price risks, respectively,” the Bank said.
In India, arabica prices have declined by over a third from their peak levels, tracking the global trend. Currently, farmgate prices of arabica parchment are hovering around ₹10,900-11,200 per 50 kg bag, while the arabica cherry prices are ruling around ₹6,450-6,650 levels. Robusta parchment prices are ruling firm around ₹10,000-10,400 levels, while robusta cherry prices are hovering around ₹5,900-6,200 levels. Growers will be harvesting the arabica coffee in the coming weeks.
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