Brazilian research institute expects significantly lower coffee crop

According to Brazilian research institute Procafe, the ongoing coffee harvest in Brazil could turn out to be 20% to 30% lower than previously estimated in March. Two thirds of the coffee crop have already been harvested - according to Procafe, the beans are relatively small and in some cases poorly developed. It is becoming increasingly clear that the dry spell in January had a more damaging impact on the coffee plants than previously assumed. 

"The Arabica price responded by gaining only a slight 0.3% and closed at 124.90 US cents per pound. The continued weakness of the Brazilian real is preventing any more pronounced recovery of the price. One US dollar now costs almost 3.50 real - the highest level in 12½ years", notes Commerzbank.