The best hope for a rise in arabica coffee prices may be a continued revival in values of robusta beans, a leading analyst said, forecasting that output in Colombia could recover to its highest for more than 20 years.
Fundamentals for arabica coffee prices "remain negative", thanks to "expectations that supplies will be plentiful", veteran soft commodities analyst Judith Ganes-Chase said.
Besides the boost to supplies from 2013's unusually strong Brazilian harvest, for an off-year in the country's cycle of higher and lower production years, Colombia, the second ranker arabica grower, looks in for a bumper harvest too.
Colombia has, since 2008-09, seen output fall well below historical levels thanks to the impact of an outbreak of roya fungus and a replanting programme with trees resistant to the disease.
Production fell to 7.7m bags two seasons ago.
However, Colombia's 9.93m-bag harvest in the 2012-13 season, which ended last month, in beating the US Department of Agriculture forecast by 1m bags, "leads to high promise of even stronger output in 2013-14", Ms Ganes Chase said.
"It is possible that Colombian output could reach even 12m bags now the recovery is underway, disease is under control and the newly-planted trees are starting to bear fruit.
"Colombia could even see production shoot back up towards 13m-14m bags the next season."
That would represent the strongest harvest since 1992-93 - and defy a call by Colombia's agriculture ministry earlier this week to farmers to restrain production, or risk worsening pressure on arabica coffee prices already near multi-year lows.
'Best hope for a sustainable rally'
There are strong forecasts for production too of robusta beans, the cheaper coffee grown largely in South East Asia, and generally considered of poorer quality to arabica.
However, stocks held for delivery against London robusta futures have tumbled, dropping 19% to 60,380 tonnes in the two weeks to September 26, as weaker prices prompted suppliers to hold back.
"Clearly if there is a crop issue or demand just continues to exceed supply as it has done, than the market could start to respond," Ms Ganes-Chase said.
A rise in robusta prices "could spark a run up in arabica prices since it could cause demand to shift back to more plentiful arabica supplies.
"It is the best hope for a sustainable arabica rally, absent a weather issue."
In fact, robusta coffee futures eased on Friday, standing down 0.7% at $1,724 a tonne for November in afternoon deals in London, in a decline deemed down largely to profit-taking, after a recovery of more than $150 a tonne in prices from a late-September low.
However, rains in Vietnam, the top robusta producing country, are, in delaying the onset of what is expected to be a bumper harvest, are seen by many observers as preventing a significant decline.
Conversely, while arabica futures for December were 0.3% higher at 114.70 cents a pound, there are many who believe the market remains on a downward trend for now.
Cepea, the Brazil-based crop research group, said that its sources were not expecting rises in arabica prices, "at least in the short term".
It may not be until early 2014 that "a positive impact" on markets may be seen from a Brazilian move to shore up values by offering guaranteed prices to producers, Cepea said.