Coffee drops to two-year low on Brazil crop forecast

Coffee output in Brazil, the world's top producer and exporter, may rise by as much as 20 per cent to a record in 2016 as rain boosted crops and expanded plantings.

Growers may reap between 49.1 million and 51.9 million bags, up from 43.2 million bags in 2015, the Agriculture Ministry's crop-forecasting agency known as Conab said Wednesday in its first forecast for the next harvest. Arabica production may increase as much as 24 per cent while robusta output is seen rising up to 8 per cent.

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Resumption of the weekly Auctions

The Nairobi Coffee Exchange weekly auctions resumed today after 4 weeks Christmas recess break.

We are currently receiving the main crop coffee mainly from the central region of Mt. Kenya. It is anticipated that we shall have about 25,000 bags (60kg) on offer per week for the next 2 or 3 months.

Despite the low global prices at ICE New York caused by the favorable weather forecast in Brazil, the strong US dollar leading to a weakening of the Brazilian currency, the weak Chinese economic data and probably the Middle East political tension, we are witnessing relatively encouraging prices well above that benchmark.

By Daniel Mbithi