Weak currencies of two most important producer countries to weigh on Arabica coffee price

The renewed fall in price of Arabica Coffee was due to the depreciation of the Brazilian real to a twelve-year low against the US dollar. Brazil is the leading producer of Arabica coffee. 

The currency of Colombia, the second-largest Arabica producer, has also depreciated by 15% against the US dollar this year. The weak currencies of the producer countries boost coffee exports and thus increase worldwide supply. 

Colombia exported 10% more coffee in the first half of 2015 than in the equivalent period last year, though this was also due to 13% higher production. The Brazilian coffee harvest in 2015/16 is making only sluggish progress so far. 

According to the research company Safras & Mercado, only 35% of the Arabica crop had been harvested by 7 July. The figure by this date last year was already 55%. After drying, the beans arrive at the warehouses. It is said that the beans are smaller than usual, as they were last year, but of good quality. 

"This is good news given that heavy rainfall in May and June had given rise to concerns about lower quality and had resulted in delays to harvesting. What is more, dry weather is forecast for this week and next, which should facilitate the ongoing harvest and drying process", says Commerzbank.