Arabica price on way up

The Arabica market made a recovery last week after a 12 per cent price drop since the start of the year. Volcafe has reported a 7 per cent rebound in Arabica prices in the last week of January, back near the 120-price point. Non-commercial traders were the best buyers following the Arabica price rally off the recent two-year low. Volcafe said a lack of new fundamental indicators implies that coffee prices were influenced by outside markets.  The rebound takes Arabica prices back towards the five-month average. Robusta prices rallied off the new contract lows last week, but scale up origin selling provided resistance. Non-commercial sellers were less aggressive on the Robusta market and traded volume was much lower. Brazil’s January shipments are pointing towards another strong month, with initial reports suggesting quite high export volumes. January rainfall recorded above historical averages in coffee areas, providing some relief for a nation battling its worst recession in living memory, a political corruption investigation, and an outbreak of the Zika virus. Rains in Colombia were below average in January, causing some concern for growers. Volcafe said the internal market was once again more active last week, with prices differentially unchanged. Demand for Costa Rican coffee remains high and with 69 per cent of the crop now harvested, focus is already moving towards the new crop. In Africa, Kenya offered 23,000 60-kilogram bags of coffee to auction last week, with bidding fierce for top quality coffees. “Prices jumped considerably,” said Volcafe. “But again, a substantial portion will remain unsold due to higher reserve prices. For the next four weeks more top quality coffees are coming to the auction and therefore we can expect large price ranges.”