Coffee Needs to Rise 3% a Year to Keep Up With Brazilian Costs

Arabica coffee prices would need to climb by 3 percent a year to keep up with the rising cost of production in Brazil, the world’s largest producer, according to independent analyst Neil Rosser.

Prices of robusta beans would have to rise 11 percent a year to keep up with climbing production costs in Vietnam, the biggest grower of the variety, London-based Rosser, who has covered coffee for more than 20 years and was a managing director for the statistical unit of Hamburg-based Neumann Gruppe GmbH, said at a conference in Geneva today.

The cost of producing coffee in Brazil is 330 reais ($159) to 370 reais a bag, according to Rosser. In Vietnam, the cost of production is 32,500 dong ($1.50) a kilogram, he said.

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