Falling Brazilian exports drive up Arabica price

Arabica has surged to its highest price since February 2015 after Brazil’s leading producer, the Cooxupe cooperative, cut it export estimate for 2016 due to the effects of drought and rising domestic consumption. Cooxupe has cut its export outlook by 500,000 60-kilogram bags, to 4 million bags for the year. Arabica reached US$1.645 per pound on the back of the news, setting it on track for its sixth straight monthly gain. The news comes on the heels of continued bad news on the Robusta front, with challenging conditions in the world’s two leading robusta-producing nations – Vietnam and Brazil – driving supply down and prices up. The short supply of Robusta, which is usually the cheaper and more plentiful variety of coffee on the market, has driven many roasters to look to Arabica as a substitute, a situation that will become challenging on the back of the latest news from Cooxupe.