World coffee prices recede in 2013 for the third consecutive year

The world coffee prices fell by 20 % in 2013, exemplifying the struggle in some commodity markets "against an avalanche of supply." The world's coffee production is increasing as a result of more acres devoted to the culture and the adoption of more productive and resistant plants.
Producers of Colombia and Ethiopia have decided to boost production for over three years when prices were shooting. Now the market of $ 6.1 billion of future Arabica representing most of the world's coffee production is grappling with the consequences of this increase.
On Monday, December 30, Arabica coffee prices fell 165 points, or 1.42%, to 114.70 cents a pound on the New York Stock Exchange (ICE Futures U.S.), and with the Arabian forecast to end the year in negative territory, as occurred in 2011 and 2012. Coffee prices did not fall for three consecutive years since the early 1990s.
Only since the end of 2011, the accumulated depreciation is 49%. That's the biggest drop in a sequence of two years since 2000-2001, when prices fell 63%. Many investors have abandoned bets high prices and most designs that quotations will continue to drop, according to data from Trade Commission Commodity Futures (TCCF).
In the season ending September 30, the world's coffee production rose 7.8% to 144.6 million bags of 60 pounds, according to the International Coffee Organization (ICO). Some market observers believe that production may increase again in 2014.
"I do not think we have seen the absolute minimum for prices. There is a strong possibility that we will have record production in the new crop of coffee, "said Sterling Smith, an expert on future of Citigroup.
The next crop of Brazil hits the market in June, further weighing on prices. Rabobank estimates that prices could fall to 95 cents/lb by the fourth quarter of 2014. The U.S. Department of Agriculture predicts that world coffee stocks rise 7.5% at the end of the crop year 2013/14 to 36.3 million bags.
Source: Cenário MT