Much Higher Prices is expected for Robusta Coffee

Two straight years of deficit in global robusta coffee output will create a cumulative supply deficit of 8 million bags that should be reflected in much higher prices, Sunny Verghese,chief executive officer of Singapore-listed company Olam International Ltd’s said on Wednesday.

“We expect two consecutive years of massive shortfalls in the robusta market,That should reflect in much-higher fair value for coffee” said Olam co-founder and Chief Executive Sunny Verghese.

On Wednesday,Sunny Verghese released third quarter results of Olam, It reported a 17.5 per cent growth in third quarter net profit on higher sales volume and improved operational performance.

He also said,a possible La Nina would also bring about drier conditions to Brazil.

In arabica, he expects short term rally in coffee prices but once the very large estimated 2018/19 arabica crop in Brazil comes to pass, which will be a record high crop, we expect that will have a bearish impact on prices.

Read more : Reuters.com