The quotation of international Arabica coffee transaction is expected to rise by the end of the year!

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After digesting the current surplus, the market will be in short supply of Arabica coffee in the next quarter, with prices nearly 8% higher than the current level, according to a London Reuters survey of 11 traders and analysts on February 2nd.

According to the median forecast of survey participants, the price of Arabica coffee will reach $1.35 per pound by the end of 2021, up 7.7 per cent from Monday's closing price and 5.3 per cent higher than the level at the end of 2020.

Brazilian Arabica coffee will enter a low yield cycle once every two years in 2021: 22 season. Respondents expect production to fall from 69 million bags in the current quarter to 55.51 million bags (60 kg / bag), which will lead to a shortage of 8.5 million bags in the Arabica market next quarter.

The price of Arabica coffee fell 1.1% last year due to a record total harvest of Brazilian coffee. The impact of the drought in Brazil will undermine the prospects for the upcoming Arabica coffee season.

Carlos Mera, an analyst at Rabobank, said that as the promotion of the vaccine began to have an impact on the spread of the virus, the global economy was expected to recover this year, helping to increase coffee consumption.

People involved in the survey said that Arabica coffee stocks certified by the ICE Exchange declined at the end of 2020, and the future recovery in coffee consumption will help raise prices. At the same time, some people say that the surplus coffee beans on the market will limit the price rise.

The price of robusta coffee is expected to reach $1475 a tonne by the end of the year, up 10.4 per cent from Monday's closing price and 6.4 per cent from the market closing price at the end of 2020.

According to the median forecast of survey participants, the global Robusta coffee market is flat this quarter, while there will be a surplus of 950000 bags next quarter. Vietnam, the world's largest producer of Robusta coffee, is expected to produce 28.8 million bags this season, below the USDA's forecast of 31.3 million bags for the 20th quarter of 2019.

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