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Arabica coffee beans are next years' hot commodity, bank says

Thursday, December 23, 2010

Arabica coffee beans are a commodity to keep in mind in 2011, according to Rabobank.
Arabica coffee beans are a commodity to keep in mind in 2011, according to Rabobank.

Arabica coffee beans are 2011's hot commodity, according to Rabobank as cited by agrimoney.com.

Coffee consumption has skyrocketed 40 percent in China during the past two years as the country develops a taste for the hot beverage. Production delays and rising demand point to a bright future for Arabica, more so than its cheaper counterpart robusta, which is widely grown in Vietnam.

"Roasters and end users continue to mix as much of the lower-value robusta in blends as possible, but added demand growth potential here is limited as roasters do not want the final product taste altered noticeably," according to Rabobank.

Inclement weather in numerous countries damaged the market for Arabica coffee beans pushing the price to 13-year highs. While La Niña has harmed Central American coffee plantations, Arabica crops elsewhere in Latin America have fallen short. Harvests in Colombia, the globe's second-largest Arabica producer, have been disappointing.

"In the last three low-cycle years, the global deficit for all coffee averaged 5.4 million bags," according to Rabobank, which underscored the likelihood of a shortfall in production for 2011.

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