Robusta bean prices are in Brazil staging a recovery from 14-month lows amid a “heating up in demand” for the variety, which is benefiting from a trend of increasing demand for instant coffee.
“The number of active robusta coffee buyers in the national spot market has grown,” research institute Cepa said, adding that “this heating up in demand has resulted in small increases in the variety’s prices in recent days”.
Brazilian robusta coffee prices, which on November 7 fell to their lowest since July last year, have bounced by 6.4% since, to $583.42 per bag, equivalent to $1,810 per tonne, to trade at their highest price of the month, according to Cepea.
The revival is being spurred too by a stand-off by producers, foreseeing further price gains.
“Aware” of the recovery, Cepea said that many of the sellers it had consulted were “limiting the volume available for sale, waiting for higher valuations”.
Brazil vs Vietnam vs London
The recovery contrasts with a decline in values in Vietnam, the top robusta producing country, where prices are feeling pressure from the ongoing harvest.
According to Reuters, prices in the Central Highlands, Vietnam’s largest coffee-growing area, have fallen by some 3-4% this month, to 39,200-40,200 dong per kilogramme, or about $1,600 per tonne.
Prices have also fallen on London’s futures exchange, where the January robusta contract was on Thursday trading at $1,806 per tonne, down by 2.5% so far for November.
Soluble outperformance
However, robusta supplies are proving particularly popular in Brazil this season, thanks to their particular reliance for demand from makers of soluble coffee.
Euromonitor this week said that soluble coffee, a key use of robusta beans, had outperformed an overall Brazilian coffee market which had shown a small decline this year, undermined by elevated prices.
“We noticed that Brazilian consumers, in the context of high coffee prices mainly, decided not to expand consumption,” the market monitoring group said.
However, demand for soluble coffee, which is generally relatively cheap, “showed stability”, it added.
Quality campaign
Indeed, Euromonitor forecast said that soluble coffee should “stand out in the coming years, mainly due to its practicality and functionality”, besides the “technological innovation and quality, which is bringing new consumers to the category”.
Meanwhile, other commentators see robusta-based products boosting their market share worldwide as the cost-of-living crisis tightens consumer purse strings.
Brazil’s soluble coffee industry group, Abics, last week launched a programme aimed at differentiating between higher and lower grade soluble coffees, in an effort to boost the market share of in particular more premium products.
Soluble coffee exports from Brazil, the world’s top shipper, hit a record 4.09m bags last year, generating revenue of $566.2m, the group said, estimating at 28% the share of the product in global coffee consumption.
‘Growers are concerned’
Cepea also noted some concern among Brazilian robusta growers over the proportion of blossoms which have set into cherries developing for the 2023 harvest.
“In the field, the arrival of a good volume of rain in the last week in Espírito Santo helped to improve the conditions” of trees in the top robusta-producing state.
“Even though rainfall is favourable, coffee growers are concerned about the considerable volume of flower abortions.”
In some arabica-growing areas too, there is disappointment at the fruit load on trees, despite a good flowering period, according to Reuters.
The Brazilian robusta price on Friday narrowed its discount to the value of arabica beans to $374.79 per bag, the lowest in 13 months, according to Cepea.
