Robusta coffee price is at a record high; high reaches consumers – 02/14/2024 – Café na Prensa

The price of Robusta coffee reached its highest level in almost 30 years in January 2024. As a result, the value of the product in Brazilian supermarkets should continue to rise in the coming months.

Grains of this species are widely used in blends by large companies. Cheaper than Arabica, camphora (commonly called Robusta or Conilon) is important for controlling industry costs.

According to a monthly report from the International Coffee Organization, Robusta rose 9.6% in January, to 148.47 cents per pound, the highest level since November 1994, when this value reached 153.33.

Crop failures in Indonesia and Vietnam – two of the three largest producers of this species in the world – justify the rise in prices.

In Vietnam, traders are withholding grains in expectation of even higher prices, which has put pressure on the international market.

The country’s 2022/23 harvest was the worst in six years. As a result, some contracts were extended for the current cycle. Therefore, this harvest would need to be large for farmers to fulfill their commitments. That wasn’t what happened, however. Vietnamese producers are once again facing a lower-than-expected harvest.

The problem in Asian countries caused Brazil to break an export record in January 2024, a month in which the country shipped 457,787 bags of 60 kg of camphor coffee, an increase of 503.5% compared to the same period in 2023, according to data released on Friday (9) by Cecafé (Brazilian Coffee Exporters Council).

Domestic production, however, is beginning to show negative signs. In Brazil, grains of this species registered the highest real value since October 2021, according to the Cepea/Esalq Indicator.

According to researchers from Cepea (Center for Advanced Studies in Applied Economics), in addition to heated external demand, the impulse also comes from uncertainties related to internal production, as there are reports of a new type of cochineal on farms in Espírito Santo – the largest producer of conilon in Brazil.

This increase should be felt by Brazilians soon. In an interview given on February 1st, the president of the entity that represents the industry in Brazil had said that a transfer to the consumer would be expected if there was no slowdown in the rise in Robusta prices on the international market.

“It is well known to everyone that in the last two months we have had a severe drought caused by the more intense effects of El Niño, which caused concern for the entire crop”, said Pavel Cardoso, president of Abic (Brazilian Coffee Industry Association) at the time. ).

“The result was an exponential increase, a worrying upward curve in the price of raw materials, notably Robusta, due to the rising price on the London Stock Exchange.”

Therefore, the price is expected to increase significantly in the coming months. “According to the average we did, something around 10% now in January and February and, if that doesn’t slow down, if this upward movement on the Stock Exchanges doesn’t cool down, potentially another 5% to 7% in March,” he said.

Cardoso also stated that industrialists have suffered from the rise in the price of raw materials and that they have avoided passing it on to the consumer, but that, now, the transfer would be inevitable, under penalty of entrepreneurs compromising “the financial health of their businesses”.

“So there will be and is already being increases for the trade and, naturally, it will reach consumers in the next 30 to 60 days”, he stated at the time.

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