Silvio Farnese, a supply director at Brazil’s Agriculture Ministry, said this season’s smaller crop could support prices, especially for arabica futures in New York, since the size of cut in production for that variety is significant, Reuters reports.
Looking further out, coffee prices could rebound as climate changes puts a dent in global production.
“Lower prices like you’re seeing at the moment is more of a risk than climate change for the next three years,” Geordie Wilkes, head of research at Sucden Financial Ltd., told Bloomberg. “Producers in central America are making a loss. In the longer term, 10 years onwards, it’s climate change which is more important for the market.”
Arabica beans require year-round temperatures of between 15 to 24 degrees Celsius, or 59 to 75 degrees Fahrenheit, according to the Coffee Research Institute. They suffer from frost if it is too cold, and the quality of the coffee declines if it is too warm. However, shifting temperatures are beginning to affect production.
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