Bloomberg News

Coffee Prices Rise to Records in Brazil on Demand, Cepea Says

December 07, 2011

Dec. 7 (Bloomberg) -- Prices of arabica and robusta coffee consumed in top global producer Brazil’s domestic market rose to records on increased demand from local roasters, researcher Cepea said.

Low-quality arabica averaged 335.23 reais ($187.19) a bag from the start of the crop in July to November, up 40 percent from a year earlier, Cepea data show. Robusta averaged 227.49 reais, up 36 percent, according to the figures. Brazilian roasters usually purchase robusta and low-quality arabica, said Cepea, a University of Sao Paulo research group.

“The low supply of these coffee beans has been pushing up prices this season,” Cepea analyst Margarete Boteon said in a report yesterday. “Both coffee types have already hit the highest values, in nominal terms.”

Coffee usage in the country probably will rise 3.5 percent this year, according to the Brazilian Association of Coffee Industries. Demand climbed to a record 19.1 million bags last year, data from the group show. Brazil may overtake the U.S. as the world’s biggest consumer in five years, Rabobank International estimates.

Local coffee demand continues to be “heated,” Boteon said. Brazil will produce 43.1 million bags this season, according to the agriculture ministry’s crop-forecasting agency. Exports may total 25 million bags, according to agents surveyed by Cepea.

--With assistance from Marvin G. Perez in New York. Editors: Dan Weeks, John Deane.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.


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