The price of robusta coffee could fall next year on ample stocks even as prices of higher quality arabicas are expected to remain firm on tighter supplies, International Coffee Organisation Executive Director Jose Sette said.
Overall coffee supply will meet demand but output from the upcoming harvest could vary among qualities as the world's leading coffee exporter, Brazil, enters a low production cycle, Sette told Reuters. The ICO estimates 2011/2012 world coffee production at 130 million 60 kg bags, down from the last harvest estimated at 133.31 million bags.
Speaking ahead of a coffee conference in the Nicaraguan capital of Managua on Monday, Sette said: "This is just a natural up and down because Brazil has a cycle that is one on year, one off year. (Next cycle) 2011/12 is an off year so it's natural that their crop is smaller." Lower-than-usual production in Colombia, a world leader in washed arabicas, propped up arabica prices to a 34-year high in early May. But Colombia is pushing for a comeback.
New York's benchmark arabica coffee contract has more than doubled from its level two years ago but is still volatile, with prices falling about 20 percent since a peak in May. Despite the high prices, coffee demand is "healthy" in most consumer nations including North America, Asian countries and northern Europe. Consumption is more sluggish in countries such as Spain, Portugal and Greece, where the countries' own "macroeconomic problems" put a strain on household spending, Sette said.
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