According to latest reports released by Rabobank after its Brazilian crop tour, 2017-18 Brazilian Arabica production will decline,this deficient Arabica production may support Arabica prices to rise this season.
Rabobank forecast Arabica fall 13% to 36.7m bags. Bank said expected drop in Arabica production is not due to any Weather condition, drop is actually a part of the cyclical nature of coffee production. Brazilian Arabica plants have an on-year and an off-year cycle due to the natural pattern of flowering and harvest.
2017-18 season crop is on off-cycle and decline of 5.3m bags is expected. Rabobank said this decline as “rather a mild drop”.
“Arabica trees were enjoying excellent health in all visited regions,” Rabobank said.
This fall in Arabica production encouraged Rabobank maintained a price outlook for the first half of 2017 “above the current market”.
Rabobank said – There are two main factors supporting arabica prices at the moment -One is the ongoing drop in the stocks to use ratio, and the other is the strength of the Brazilian real.
If the Brazilian remain stable with deficient production, can expect bullish price outlook.
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