Reuters conducted a survey on coffee prices, with 11 traders and analysts, who said the supposed growth in Brazilian production should make prices end 2020 lower than those ended in 2019.
Arabica prices will end 2020 at $ 1.20 per pound, according to the median forecast of survey participants, but still 7% below the market close in late 2019.
Prices have fallen 19% so far this month, partly due to the increase in stocks on the ICE stock exchange and the prospect of a record harvest in Brazil this year.
Respondents expect a crop of 66.9 million 60 kg bags, above the median estimate of 59 million the previous season. The global balance of supply and demand is expected to reach a surplus of 2.75 million bags in the 2020/2021 season, against a deficit of 3 million in the previous season.
"A recovery in global production, after the hot climate in late 2019, should push the coffee market to a surplus in 2020/2021, which will increase inventories and weigh prices," said Caroline Bain, chief economist at Capital Economics.
Arabica prices stayed around the lowest levels of a decade for much of last year, as they struggled to absorb the record 2018/2019 crop. They recovered at the end of the year to reach two-year highs, but fell sharply in January.
The prices of canephora coffee (robusta), used for instant coffee or blends, are expected to end the year at $ 1,425 a ton, 7% above Tuesday's closing (01/28) and 3% higher compared to the closing of the market at the end of 2019.
Production in Vietnam, the world's largest producer of (robust) camphor, is forecast at 30 million bags in 2019/2020, close to the U.S. Department of Agriculture (USDA) estimate for the 2018/2019 season of 30.4 million bags.
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