The dry conditions generated by the El Niño weather phenomenon have also resulted in poorer development of coffee beans in Columbia, a country generally known for its high-quality Arabica coffee. According to the National Committee of Coffee Growers, however, 18% of the beans this year do not meet the usual quality standards. Normally the figure is only 10%.
The quality requirements imposed on exported beans are therefore being lowered now so that the poorer quality beans can still be purchased from the coffee farmers and then exported. As far as the global market is concerned, this initially means higher availability. This gives rise to increased competition, especially for countries offering medium-quality beans, as well as for Robusta coffee which is generally regarded as being of less high quality.
Prices of both coffee types then fell in response to the announcement: Arabica coffee was down by 5.9% and Robusta coffee by 3.2%. The high degree of uncertainty about what will happen next is doubtless responsible for such a pronounced price reaction.
«The uncertainty is evident from surveys which show a wide range of expectations for the 2015/16 market balance — on average a deficit of 2.5 million bags is anticipated. There are also optimists and pessimists when it comes to the outlook for the Brazilian crop in 2016/17», says Commerzbank.
Read more at http://www.econotimes.com/Colombian-coffee-prices-under-pressure-104499#eXS7vdZYGkHqBcBC.99
Source: econotimes.com/Colombian-coffee-prices-under-pressure-104499
Colombian coffee prices under pressure
