Arabica coffee prices rose to a 34-year high – fast-approaching the barrier of $3 per pound – amid a long-standing shortage of the high-quality bean appreciated by espresso connoisseurs.
The International Coffee Organisation in London warned on Wednesday in its monthly market report that prices would remain high for the time being.
“Given the limited availability of Arabica coffee on the international market and the strength of domestic consumption in Brazil, high levels of production in Brazil in crop year 2010-11 failed to have a negative impact on prices.”
Coffee prices in general (including Robusto) were last this high in 2008, but Arabica prices are now rapidly approaching the $ 3 / pound level. Coffee traders believe that Arabica prices will soon break past $3.40 a pound, forcing roasters to raise retail prices once more. Colombia, a primary source of high-quality Arabica beans, had suffered a low crop for a third successive year. The Brazilian crop is also lower than previously expected.
The wholesale price of Arabica coffee has jumped nearly 125 per cent during the past year.
The latest Monthly Coffeee Market Report states “In conclusion, it should be noted that the precarious balance between supply and demand continues to favour firm prices. With prices expected to continue at such remunerative levels, a high level of export performance can also be expected in coffee year 2010/11. However, the prospect for replenishment of stocks in producing countries remains weak. Finally, recent increases in prices of oil products are likely to accentuate increased production costs for most agricultural products, including coffee.”