In the ever-evolving world of coffee, the World Bank’s latest Commodity Markets Outlook, October 2023, pours out some fascinating projections. Global coffee prices, much like a well-brewed cup, are expected to mellow in 2024. This anticipated shift arises from a surge in coffee supplies hailing from the prominent producers – Brazil, Vietnam, and Colombia.
14 percent decrease in Arabica coffee prices
Arabica coffee, akin to a gentle morning breeze, saw its prices slip by 14 percent in the third quarter of 2023 compared to the previous one. These price winds of change have been even more pronounced when you gaze back a year; they’ve danced down by about 30 percent. As we enter 2024, the aroma suggests a gentler brew as production is poised to bloom roughly 14 percent during the forthcoming 2023–24 season in Brazil and Colombia. These two coffee powerhouses contribute to nearly 60 percent of the world’s Arabica output.
Robusta market
But let’s not forget our Robusta comrades. These hardy beans took a slightly different journey, gaining ground with a modest 2 percent uptick during the September quarter. Compared to a year ago, Robusta prices are up by over 17 percent, standing strong and tall. Yet, the road ahead could be smoother; the Robusta market is anticipated to remain taut. The decline in production in Indonesia and Uganda, resulting in a drop of about 2,1 million bags, will weigh down on the scale, even as Vietnam steps up with an increase of 1,4 million bags. Vietnam, Indonesia, and Uganda jointly account for over two-thirds of the Robusta coffee production worldwide.
Climate influence – El Niño
While these predictions may sizzle like freshly brewed coffee, it’s worth considering the climate influence. El Niño’s shadow looms as a potential disruptor that could stir the coffee pot. In 2023, arabica prices faced a 20 percent hit, and although they are expected to regain some composure in 2024, they will likely remain stable in 2025. On the other hand, Robusta prices might face an 8 percent dip in 2024 after a remarkable 14 percent surge in 2023.
Additionally, the world economy’s tempo plays a significant role; a downturn may become a strong undertow, while El Niño’s intensification could add a sprinkle of uncertainty. With these ups and downs, coffee connoisseurs and traders must adapt to the ever-changing circumstances. As the coffee season gears, growers prepare to harvest the forthcoming arabica coffee crop. The journey through the coffee landscape continues to be rich, diverse, and flavored with change.
