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...Arabica coffee is back in surplus after a price spike in 2021 due to drought and frost in Brazil, but lower grade robusta beans from Vietnam are in short supply, not helped by the troubles in the Red Sea...
...Coffee is bought and sold using the New York price as a reference, with higher grades traded at a premium and lower grades priced at a discount....
...Lower-grade robusta — largely for the instant-coffee market — grows in low-lying regions....
...Lower grade arabica coffee has been used as a substitute for robusta beans in Brazil, where key robusta growing regions were hit by scorching heat and lack of rain....
...“Roasters increasingly substitute other robusta origins or lower-grade arabica in blends, which unsurprisingly drives up prices of the arabica groups,” it says....
...Like Colombian coffee, European virgin olive oil is sold at a premium and is easy to mix with lower-grade olive and other vegetable oils....
...One piece of good news from Volcafe was that it revised up the estimates for the lower grade robusta beans, from 16.1 to 17.1m bags thanks to improved yield expectations....
...There is evidence that lower grades of arabica have become competitive in the US and Europe, say coffee traders....
...While most of the coffee is the low-grade robusta used in instant coffee, a small but growing number of farmers are moving to grow higher quality arabica beans, which command a higher price....
...The first-month robusta contract has risen 17 per cent since the beginning of 2012, while the higher grade arabica coffee March contract in New York fell 1.6 per cent to $2.118 a pound, down almost 7 per...
...The two coffee grades have had mixed performances since the start of the year....
...For years Brazil only grew low-grade robusta for making instant coffee. Arabica beans are quite a recent thing....
...The vast majority – around 93 per cent – of Vietnam’s coffee crop, mostly composed of low-grade robusta beans, is exported for use in instant coffee blends....
...But most of the 1.2m tons of coffee Vietnam produced last year – earning the country $1.8bn – were low-grade robusta beans that ended up in cheap, generic instant coffee in the US, Europe, Japan and China...
...In London, Liffe January robusta coffee rose to a two-year high of $1,892 a tonne, up 2.8 per cent on the day....
...Robusta coffee futures in London were $4 up at $586 a tonne....
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