The Ethiopian Commodity Exchange. (Credit: John Humphrey)
By William Davison
Aug 21, 2014
Ethiopia’s arabica coffee export earnings are forecast to climb 25 percent to about $900 million in 2014-15 because of higher prices after a drought damaged plants in the biggest grower of the bean, Brazil, an industry group said.
Arabica prices on the Ethiopia Commodity Exchange could average $2 a pound if supplies of the crop in the world market are tight, Ethiopian Coffee Exporters’ Association General Manager Alemseged Assefa said in the capital, Addis Ababa. Ethiopia is Africa’s biggest producer of the crop and the origin of the arabica plant.
“Prices are favorable this year because of the Brazilian coffee drought,” Alemseged said in an interview on Aug. 18. “We presume that price will continue because of the drought.”
Arabica has surged 71 percent in New York since January after a drought hurt plantings in Brazil, the world’s biggest exporter of the beans, fueling speculation that consumption may outstrip supply. The Brazilian woes come as plantings in Central America, Mexico and Peru struggle to recover from a crop disease called leaf rust that has cut yields across the region over the past two years.
Arabica coffee for December delivery rose 1.5 percent to $1.89 a pound on the ICE Futures U.S. yesterday, tumbling 12 percent from a two-year high in April.
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