Arabica coffee prices Rise 13 percent as Lower Brazillian Output

Arabica coffee prices may rise as much as 13 percent by April amid concern that lower Brazilian output next year will pare global supplies of the beans, an industry group said. Coffee futures surged to a one-month high.

Coffee may rally to between $2 and $2.10 a pound by April, said Guilherme Braga, general director for Brazil?s Coffee Exporters Council, known as Cecafe. That would be a 13 percent jump from yesterday?s close of $1.8560 on ICE Futures U.S. in New York.

?Prices tend to continue rising because of the short supply scenario,? Braga said today in a telephone interview from Sao Paulo. ?Growers are taking advantage of prices to ship their beans and recover profit margins.?

Coffee has surged 39 percent since the start of June on concern about the prospects for crops in Brazil and Colombia, the world?s two biggest producers of arabica. Colombia said Oct. 15 a fungus that damages plants may reduce output next year, a day after growers cut the forecast for this year?s harvest.

Arabica coffee for December delivery rose 2.3 percent to $1.8985 a pound at 12:23 p.m. in New York. Earlier, the price surged as much as 3.5 percent to $1.9210, the highest for a most-active contract since Sept. 17.

Brazil may export about 31 million bags of coffee next year, compared with 30 million to 31 million bags estimated for this year and 29 million bags in 2009, Braga said.

Brazilian coffee output may fall next year as trees enter the lower-yielding half of a two-year cycle, the Agriculture Ministry said Sept. 9. A bag of coffee weighs 60 kilograms (132 pounds).

Source: bloomberg