The global coffee market is likely to shift from balance to a slight surplus in 2024-25, but shipping disruptions, container scarcity and the impact of upcoming EU deforestation rules will keep prices elevated for the rest of the year, Rabobank said.
Robusta coffee futures hit their highest level in nearly five years on Monday, while Arabica coffee futures hit their highest level in 13 years amid forecasts of bad weather in Brazil, the world’s largest producer of the variety.
Today, Rabobank expected that global coffee production will reach 174 million packages in the upcoming 2024-2025 season, which means reaching a surplus of only 1.3 million packages, thanks to Arabica.
However, he said the surplus would not affect prices this year.
“We maintain a neutral outlook for most of the rest of 2024, due to EU deforestation rules, port congestion, container scarcity and the Red Sea crisis,” he said in a note.
An EU law due to come into force at the end of the year aims to take tough action against the import of goods linked to deforestation.
Price increase
Coffee prices have seen a significant rise as traders worry about declining supplies and ongoing drought in Brazil, the world’s largest coffee producer, according to a Bloomberg report released this month.
Arabica stocks fell by more than 34,000 bags in New York-based warehouses in the first week of this month, and robusta stocks continued to decline.
Dry weather conditions in Brazil are affecting future crops, with temperatures expected to remain above average until mid-September.
