It is the best of times and the worst of times for coffee buyers. Arabica coffee prices have plummeted since the start of the year, but Robusta prices have increased.

At £2,613/t, the price of the higher-quality Arabica beans is now 19% lower than at the start of January, depressed by farmers in Brazil clearing stock in preparation for what is forecast to be a bumper harvest this May [Mintec 10w/e 14 March].

By contrast, Robusta - which is more bitter and has more caffeine - rose 6.6% to £1,261.8/t. Farmers in Vietnam, eager to see prices rise after January’s Lunar New Year Holiday, have been holding on to beans from last autumn’s harvest, so supplies to the EU have been lower than expected.

The current pricing dynamics would have traditionally played into the hands of filter coffee makers, who used to primarily use Arabica, whereas instant coffee manufacturers used Robusta. More recently, however, suppliers have been blending the two varieties, creating a less clear-picture of the winners and losers.

“These days a lot of instants use Arabica, and Robusta can be used in filter coffee as it has a high caffeine kick,” says Mintec analyst Robert Miles.

Furthermore, many buyers have not been able to take advantage of the recent drop in Arabica prices because of buying schedules.

“Buyers only have modest buying needs right now because they bought ahead to protect against surprises from the Brazilian crop,” says Rabobank analyst Keith Flurry.

When the price of Arabica last spiked, reaching a 30-year high in early 2010, coffee manufacturers shifted towards using more Robusta. The price gap between Arabica and Robusta, which widened again last summer, has now shrunk by half.

However, analysts do not expect roasters to switch back to Arabica yet. “Robusta remains substantially cheaper, so the buying dynamics are unlikely to change,” says Flurry.

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