Arabica Coffee Bean High, Coffee prices 2012 Remain Support

Coffee prices will remain supported 2012 due to climate change and market fundamentals, according to Santos, Brazil-based broker Escritorio Carvalhaes.

The price of arabica beans rose to a 14-year high of $3.089 a pound in New York on May 3 as heavy rainfall caused by the La Nina weather conditions cut output in Colombia, the world’s second-largest producer of the variety. Coffee slipped 5.7 percent in New York last year and closed 42 percent above the 5- year average, according to data on Bloomberg.

“Climate changes and market fundamentals will maintain prices in 2012, but we will continue to be tied to the developments of the euro-zone crisis and its consequences to the global economy,” the broker said in a report e-mailed yesterday.

Arabica coffee supplies will match demand in the 2011-12 season started in October after at least three years of deficits, data from Macquarie Group Ltd. show. Arabica beans are grown mainly in Latin America and favored for specialty drinks such as those made by Starbucks Corp.

Coffee growers in Brazil, the world’s largest producer, are investing in improving yields and bean quality, according to the Carvalhaes report, with “no significant increases” in planted area.

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