Arabica coffee has had a dismal 2012 for prices, losing more than one-third of its value, making it a particularly poor performer among a New York soft commodities complex for which the year has been difficult.

Prices of the bean have been undermined by a strong Brazilian crop, pegged by domestic commodities bureau at a record 50.8m bags including robusta coffee, and ideas of a return to a market surplus in 2012-13.

But with 2013 set to be an "off" year for Brazil, which has alternate higher and lower cropping years, can arabica coffee recover some lost ground?

Barclays

 "We expect Brazil's 2013-14 'off-year' crop to experience a smaller downturn than previous 'off-years' as weather has been favourable for flowering coffee trees. Previous 'off-years' experienced declines of 15-20%; however, for 2013-14, we expect a decline of only 5.9%.

"On the demand side, we expect further substitution from arabica beans to robusta to be limited due to the narrowing premium arabica coffee commands, although continued macro-uncertainty may suppress demand.

"We expect coffee prices to be supported by an 'off year' crop in Brazil. Further, US Commodity Futures Trading Commission data show that a large speculative short position has built up and has left the market vulnerable to a short-covering rally."

Commerzbank

"The difficult global economic environment, higher exports from Central America and a record crop from a high-yield year in Brazil are all factors contributing to the depressed price level for arabica coffee.

"Poor sentiment on the coffee market is also reflected in the positioning of speculative financial investors - net short positions have reached their highest level since May 2007.

"Although there is no shortage of arabica coffee at present, prices for this coffee type should pick up in the next few months in our view, as the expectation of a smaller next crop due to the coming low-yield year in Brazil, by far the biggest producer, should soon have more of an impact on pricing.

"The 62% rise of stocks observed over the year on the ICE exchange should then change."

Rabobank

"Coffee prices are expected to increase in 2013, finding support from increasing global demand and tightening stocks levels.

"Arabica fundamentals are forecast to be in surplus for 2012-13, which will be a bearish aspect weighing on prices in early 2013 due to investor shorting and hand-to-mouth roaster buying. Our 2012-13 forecast for arabica is for a 4.1m-bag surplus.

"Early projections for 2013-14 suggest a likely deficit. The arabica price outlook in 2013 is positive due to this potential deficit, anticipated roaster buying and Brazilian farmers holding supply off the market."

Societe Generale

"Coffee prices appear to be extremely undervalued from a fundamental perspective, but macro concerns have continued to push prices down to new lows.

"With Brazilian farmers hoarding beans on the price break, this large inventory is now weighing on the market in anticipation of a forced sale ahead of the next harvest."While ICE inventories have been rising over the last 12 months, and especially so since June, they are still historically very low.

"To be sure, prices reacted swiftly to falling inventories over the last several years. However, they decoupled in May 2011.

"ICE inventories hit a five-year high on 24 Oct 2008 at 4.6m bags. The closing arabica coffee price that day was 108.65 cents a pound. As of 14 Nov 2012, ICE inventories stood at 2.5m bags while prices closed at 147.70 cents a pound.

"Taken together, we maintain that the sell-off in coffee is overdone as the market does not fully appreciate how historically low inventories are."