Global coffee prices set for shift in 2024 due to supply changes

The global coffee market is expected to experience significant shifts in the coming year, according to the World Bank’s Commodity Markets Outlook. The report predicts a decline in Arabica and Robusta coffee prices in 2024 due to increased supply from key producers Brazil, Vietnam, and Colombia.

Arabica coffee prices saw a 14% drop in Q3 of 2023 and are currently around 30% lower than last year. This trend is anticipated to continue into 2024 as Brazil and Colombia are ramping up their production by approximately 14%. These two countries account for about 60% of the global Arabica output.

Despite the overall downward trend, Robusta coffee prices rose slightly by 2% during the September quarter and are over 17% higher than last year. The robusta market is projected to remain tight due to reduced production in Indonesia and Uganda. However, Vietnam’s increased output, which contributes to more than two-thirds of global robusta production, could potentially ease this tightness.

The report also highlights potential factors that could impact these price trends. An intensification of El Niño conditions and a potential global economic downturn could have significant effects on coffee prices.

In India, Arabica prices have followed the global trend with a decline of over a third. The farmgate prices of Arabica parchment stand at ₹10,900-11,200 per 50 kg bag, while Arabica cherry prices are at ₹6,450-6,650 levels. Conversely, Robusta prices remain firm with parchment prices around ₹10,000-10,400 levels and cherry prices hovering around ₹5,900-6,200 levels.

As the global coffee market adjusts to these changes in supply and demand dynamics, producers and consumers alike will need to keep a close eye on these evolving trends throughout 2024.

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