15241 views September 2, 2017 posted by Maja Wallengren

SPECIAL REPORT: The Arabica-Robusta Balance – Does It Really Matter?


It used to be that arabica coffee made up between 65 and 70 percent of the world’s entire global production, but as consumption patterns have shifted so have the balance of what and where the demand for the world’s two leading commercial species is found. By the 2011-12 crop cycle the share of robusta beans in the overall export volume had expanded to a historic solid 40 percent. This left many industry officials concerned the end-quality of the coffee sold in retail outlets by roasters across the key consumer markets in Europe and the U.S. may suffer and that lower overall quality could result in lower demand. But an indebt look at what’s in store for the world’s supply-demand balance reveals the growing demand for robusta, rather than negatively affecting the strong consumption boom seen in the last decade may actually have helped boost global demand. And this outlook could continue for several years more.

Coffee Beans 10
-A special report by SpillingTheBeans for the Global Coffee Review’s Jan. 2013 issue


In times of crisis the world is drinking more coffee than ever. And while the impact of the economic crisis on the coffee industry was immediate on two different fronts, in a development that took some in the industry by surprise consumer demand has proven to be resilient to the negative growth in the global economy at large. At the consumer market level, however, there is no denying that roasters were struggling to keep end-retail prices at bay from the ongoing negative impact of reduced household incomes which came following the onset of the economic crisis, especially in the Euro zone across southern Europe.

“In Italy it’s all been about robusta for years, but until about four years ago we still maintained a balance of 55 percent arabica and 45 percent robusta. Today it’s now moved to between 55 and 60 percent robusta and 40 to 45 percent arabica,” said Elio Vercelli, sales representative for Italy’s Green Elite Coffee, which imports some 750,000 60-kilogram bags of green coffee a year.

The impact of the economic crisis on the coffee market unfolded trough two principal stages; First came the global economic shock in late 2008 which sent the U.S. into recession while the Euro zone debt-crisis spiraled out of control. But while households incomes and average consumer spending power wouldn’t start to emerge until about a year later, the coffee industry was soon to face another challenge as the production crisis in Colombia started to surface in early 2009. This led to a steep increase in the premiums paid in addition to the New York arabica prices for top quality arabica beans, and this is where the arabica-robusta balance really started to shift.


Changing consumer trends and shifts from higher arabica shares to cheaper robusta beans is nothing new to the coffee industry. In the 1978-79 coffee cycle world production was just over 79 million bags of which 75 percent was made up by arabica beans and the remainder was all robusta. Of the total balance 64.6 million bags were exported, according to historical data from The U.S. Department of Agriculture.

But the first major shift away from arabica to robusta didn’t come until May 1997 when New York arabica prices rallied to near historic highs of $3.19/lb and led to a major shift among roasters toward higher use of robusta in order to keep retail prices in checks. Of the total world production of 103.8 million bags reached in the 1996-97 cycle, the share of robusta had risen to 36 percent, or 37.2 million bags.

“We were forced to drastically reduce our imports from Central America and Colombia, because the purchasing prices we had to pay at the import level reached as high as $3.80 per pound and we just couldn’t pay these levels. It was impossible to add to the retail price, not just in Italy but also in France, so as an industry as a whole we were obliged to change our blends and start using more robusta coffee,” said Vercelli.

In the last 2012-13 harvest the London-based International Coffee Organization estimated that the boom in robusta production continued and produced a world record of close to 146 million bags. Robusta output alone was pegged to have risen 5.1 percent to just over 56 million bags – or 38.4 percent of the total market – while arabica production were seen expanding 10.6 percent to 89.9 million bags, thanks primarily to the on-cycle in the world’s largest grower Brazil.

Small Producers Bringing In Fresh Harvest in Papua New Guinea

Consumption, meanwhile, continues to enjoy the prospects of solid demand and was estimated at at least 139 million bags by the end of 2011, said the ICO. The period of strong growth seen in the last 10 years is expected to continue for at least another 5 to 10 years in most markets, agree both the USDA, ICO and independent analysts. Based on the most conservative projections for overall demand to grow at a minimum 1.5 percent world consumption is seen reaching at least 141 million bags by the end of 2012 and approach between 143 million and 144 million bags by the end of 2013. If growth, however, continues at the average 2.5 percent a year as seen in the last decade, total demand will by the end of 2013 surpass 146 million bags and the world supply-demand balance will most likely continue into a 6th year of running a deficit.

“World production of Robusta coffee in 2011-12 reached a historical record of 53.3 million bags,” said the ICO. “The most significant change was observed in Robustas, which grew by 13.2% to reach 41.8 million bags, representing 38.8% of the world total.”

The new found demand for Robusta led to an all-time share of close to 40 percent in the last crop, while export needs were met by robusta beans for 39 percent. In the 2012-13 cycle robusta consumers may face a deficit as high as 6 million bags and a number of traders and analysts have voiced concern as to how the growing demand for robusta could impact the quality equation.

“We have already seen this exact same thing happening in 1997 when higher retail prices led to a dramatic drop in the quality used in blends as roasters switched from arabica to robusta, and this in turn resulted in weaker consumer demand for several years until producers started to improve quality,” said one U.S. trader in the New York green coffee market.

But many roasters and importers disagree, saying the key component in the underlying equation for the arabica-robusta balance is found in the significant improvements achieved by producers across the world not just in arabica coffee but increasingly also seen in robusta coffee.


“We buy about 1 million bags from Vietnam in Italy but these are good robustas, grade 1 and polished robusta and the consumers have found the taste difference is not so bad after all; they have been happy to sacrifice a little on the quality to be able to continue to drink as much coffee as before the crisis. By the end of the day coffee is still cheap, you can get a coffee or a shot of espresso for 1 Euro but a coke or other soft drinks will cost you 2 Euros,” said Vercelli.

Export figures from Vietnam confirm that the share of coffee exports certified as Grade 1 beans made up about 30 percent of shipments in the last crop, compared to between 10 and 15 percent 10 years ago, and at a time when the overall export volume was significantly lower than today.

Add to this Brazil’s second largest producing state of Espirito Santo, which is another region that has contributed with a large share of the new robusta added to the market in the last few years and which is winning increased recognition for producing much more mild and neutral robustas.

With Coffee Grower Paulo Oliari In Espirito Santo in Brazil
-SpillingTheBeans with Robusta growers in Brazil’s Espirito Santo state

“In the past, much more lower qualities were blended, like black and green beans, but conillons, or robusta beans, can be more neutral than for example fermented beans and in the last few years the quality of the conillons have improved dramatically,” said a veteran trader with Brazil’s Santos-based exporters Comexim.

If the improvement of robusta quality is a surprise factor, then the second surprise factor is all the more fascinating, because a lot of the new demand that has sustained the persistently strong consumer growth in the last few years is find in the mostly robusta-based instant coffee, said Raymond Neogh, general director of FES Vietnam Co Ltd, the leading manufacturer of soluble coffee in Vietnam.

“World demand for instant coffee has doubled in the last 7 years and even in Vietnamese market this market segment is expected to grow 6.9 percent a year. Robusta beans are the Nr 1 choice for most instant manufacturers because of the price compared to arabica which is more expensive and has a lower extraction rate, and the growing demand in emerging market is by large fueled by instant coffee,” said Neogh.

Robusta Coffee Yields in Vietnam

Perhaps the most encouraging news to the market is that roasters across the world increasingly are learning to mix blends according to availability in order to keep retail prices the least affected as possible while world leaders continue to work to find lasting solutions to the financial crisis.

And while robusta producers have had no problems finding new takers for their crops in these last few years the outlook for a deficit in the robusta supply in the 2012-13 cycle is already making some in the industry believe this could lead roasters to switch back to increased arabica use from Brazil during the new year.

“We have seen the demand for robustas in the 20 11-12 cycle growing by 6 million bags to 67 million bags and that traditional demand for between 3.5 million to 4 million bags of arabica switched to robusta,” said Alex Gruber, Director of the coffee division for Singapore-based green coffee traders Tong Teik Pte Ltd.

But as the price gap between arabica and robusta beans narrowed considerably during the last quarter of 2012, combined with the possibility of Brazil potentially producing a strong off-cycle in the next 2013-14 harvest which starts in late April, some of the robusta deficit “could be offset with Brazil naturals and allow for a quality switch back into arabica” coffee, Gruber told the Coffee Outlook conference in Vietnam.

While concerns remain as to the impact in the short and medium term of the growing robusta dependency, to many importing markets such as top-quality consumer and the world’s 3rd largest importer Japan, the most important aspect is that the overall demand is met for their industries to maintain their business.

“We are not really that concerned, because our roasters need both robusta and arabica coffee in order to maintain their blends,” said Toyohide Nishino, executive director All Japan Coffee Association.

To see more details and figures, please go to: https://globalcoffeereview.com/market-reports/view/arabica-and-robusta-production-divide-in-2013


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