Arabica Coffee Market Oversold

ICE Arabica coffee prices have taken a dive since the end of 2014.

photo of red coffee berries

  • ICE Arabica coffee prices have dropped 17% since the end of 2014
  • The weakness of currencies like the Brazilian real explains only a small part of the price drop
  • Strong wave of speculative selling is the main driver for the price drop but the fundamentals give support for prices well above USc 150/lb
  • The fundamental outlook is for a significant deficit in the current 2014/15 crop year of 6.0 million bags and a very preliminary deficit of 1.6 million bags for 2015/16
  • Demand in non-producing countries is significantly higher than expected a quarter ago. Global demand has grown at 2.1% in 2014, just a bit slower than the 2.7% estimated for 2013

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