SAO PAULO: The two-year robusta coffee rally to record high prices last week has given investors and farmers a rush for that variety in the world’s top coffee grower Brazil, experts said.
Brazil has traditionally been the largest producer of arabica coffee, a milder variety preferred by high-end cafeterias such as Starbucks. However, production of robusta, widely used to make instant coffee, has been rapidly growing with high demand and good prices.
“People were already planting more robusta, but with the recent spike in prices it got crazy,” said Enrique Alves, a coffee researcher at Brazil’s agricultural research company Embrapa in the northern state of Rondonia.
“Robusta seedling producers told me they are at the limit of their production capacity and are not taking new orders,” he said. Robusta futures on ICE Europe rose 58% in 2023 from 2022 and are 68% up this year. The main driver is production problems in Vietnam, the world’s largest robusta grower, where unfavorable weather hurt the crops. As a result, foreign demand for Brazilian robustas has soared.
Comments
Comments are closed for this article.