Macquarie warns of a ‘structural oversupply’ in the Arabica coffee market that will only get worse causing prices to remain low for the next two seasons. The bank slashed its forecast for New York Arabica coffee futures by up to .50 cents per pound for the October – December quarter of next year. On a quarter-average basis, prices would be the weakest in eight years. Despite the oversupply Macquarie does not see production dropping as subsidies and intervention programs will keep coffee output high for a prolonged period of time. Demand will increase 2.3% – 2.6% in 2014-2015 however this will not offset the oversupply. To read further about Macquarie’s outlook for sugar, cocoa and cotton:
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