Coffee Futures Arabica Rebound, World Coffee Demand Remain Farms

Coffee futures of Arabica may rebound to as high as $2 a pound by year-end as global stockpiles tighten, world demand remains firm. Arabica coffee for May delivery advanced 1 percent to $1.7875 a pound yesterday on ICE Futures U.S. in New York, after falling to $1.7445, the lowest for a most-active contract since Oct. 8, 2010. Still, prices are down 33 percent in the past year as the market anticipated Brazil’s higher yields for this year.

Brazilian will enter the low-cycle of the biennial harvest in 2013, reducing the small surplus left by the bigger production this year, Illy said. In addition, Colombia’s output, the second biggest grower of the arabica beans, has not recovered from weather-induced losses seen in the last three years, which may leave global stockpiles in a tight situation, as demand remains resilient, he said.

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