Supply is in short supply for years, inventory may fall for 8 years, and the price of coffee is afraid to rise.

Do you like coffee? be careful that the price of coffee goes up quietly! Coffee supplies have been in short supply for four consecutive years and inventories have plummeted, and analysts have warned that prices could fluctuate sharply in the coming months.

AgriMoney and the Financial Times reported that Robobank predicted that the global coffee production shortage would increase from the previous estimate of 2.5 million tons to 2.8 million tons in 2017-18, mainly due to an increase in global consumption, while production declined in Brazil and Indonesia due to drought and torrential rains respectively.

Brazil is the world's largest producer of coffee beans. According to the report, the number of Arabica coffee beans produced in Brazil in 2017-18 will decrease by 13%. Brazil's Arabica beans will be reduced after one year and the next year, giving coffee trees a rest. Last year, there was a bumper harvest of coffee, producing 42 million bags (60 kg each). This year, it is estimated that it will be reduced to 36.7 million bags.

The decline in output comes as inventories available for consumption are expected to fall to an eight-year low. The inventory-to-use ratio (stocks-to-use ratio) of Arabica is estimated at 30 per cent, the lowest since 2009-2010. Low inventory means that if there are weather conditions, the price impact will be more severe. In addition, Brazilian authorities auctioned inventory, which fell to zero for the first time in a decade, and no inventory can ease the pressure on supply shortages.

The current price of Arabica is $1.422 a pound, about 10 per cent higher than at the beginning of 2016, but still less than the nearly $1.80 at the end of last year when Robusta coffee beans were in short supply. Some analysts question that coffee prices have yet to reflect supply shortages.