Low price of Arabica coffee threatens production worldwide

The world's coffee production may decrease because falling prices of Arabica should encourage producers to migrate to commodities or more profitable to sell their land to real estate development, designed the executive director of the International Coffee Organization (ICO), Robério Oliveira Silva, on Thursday. "Everything is competition for coffee at the moment," he said. The ample supply of Arabica coffee has pushed the premium Arabica versus Robusta, cheaper kind. On February 7, the price differences between Arabica and Robusta futures reached its narrowest point since April 2009, at 45.54 cents a pound. The Arabica is traded on the New York Stock Exchange (ICE Futures U.S.), while Robusta is quoted on the London Stock Exchange (Euronext Liffe). The current low price of Arabica means that farmers can easily be attracted to more profitable crops, Robério Silva said. "A record crop of 50.8 million bags from Brazil in 2012/2013, together with the crop year 2013/2014, are weighing on the market. Weak demand in traditional markets for coffee, which grows around 1% per year, also contributes to the feeling bassist widespread, "according to the executive. In Brazil, crops like oranges and cane sugar compete with the coffee. In Africa, the housing market is the biggest competitor for the area as Robério Silva. "Governments need to do more to help farmers, and financial incentives must stay intact for producers continue to produce coffee," he added.
Source: Revista Globo Rural