Coffee prices rise on low Brazil output

Prices of arabica coffee have jumped by about 20 per cent, while those of robusta have gone up by 6 per cent over the last one month on account of the rise in international prices.

The price of arabica cherry (raw) has gone up from Rs 1,900 to Rs 2,300 for a 50 kg bag, while the arabica parchment (raw) price has gone up from Rs 4,200 to Rs 4,600 for a 50 kg bag.

The rise in arabica prices has brought a marginal rise in prices of robusta cherry (raw) from Rs 1,600 to Rs 1,700 for a 50 kg bag and robusta parchment (raw) from Rs 2,900 to Rs 3,100.

There is anticipation that the crop output for 2007 in Brazil may decline and this is driving up the international prices, said Selvam, director of Ramesh Exports.

There is a possibility of arabica prices moving up further. Robusta could also see a marginal rise, as buyers are likely to turn to it, owing to high arabica prices, he said.

"The domestic coffee prices closely follow the international prices. With the possibility of a decline in Brazil's production, the prices of arabica coffee will see a rise," said a source from Carritt Moran and Company.

The International Coffee Organisation (ICO) has forecast a 2 per cent rise in global coffee consumption to 7 million tonne.

Brazil, the world's biggest coffee producer, is unlikely to repeat its bumper crop in 2007 because trees usually rest after a big harvest. In 2003, a 38 per cent drop in output followed the record crop of 53.6 million bags in 2002.

According to the ICO, the price of Brazilian natural arabica has gone up from 99.23 cents per lb in November to 117.49 cents on December 5.

The price of Columbian mild arabica has moved from 112.67 cents per lb to 131.76 cents in the same period.