Global Coffee Prices Update - No Signs Of Robusta Price Correction In The Near Term: Nirmal Bang

Nirmal Bang Report

Robusta prices continue to inch upwards on account of weather challenges in key producing countries. September 2024 Robusta price is trading ~89% higher than the historical peak achieved in 1994.

In our last update, we had analysed the annual coffee output report card and forecasts issued by the USDA for six countries which together contribute ~75% to the total global coffee production (Arabica and Robusta). The conclusion was: flattish Robusta output despite recovery in Indonesia.

Sky high Robusta prices have been the cause for concern over the last 1.5 years whereas other blends have not witnessed similar inflation. Arabica’s premium over Robusta continues to shrink. It seems that the correction in prices should take a little longer.

New contract tenures are getting shorter as brand owners are anticipating a decline in green coffee prices. While this is not an ideal scenario for coffee processors considering the working capital burden, larger players should strengthen their position further.

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