April 8 - In the worldwide coffee chain, the Robusta bean variety has increased in volume and profitability. A Rabobank Food & Agri Research and Advisory report by Mariana Gonzalez describes how the bitter, low-grade Robusta coffee bean has sweetened the global coffee pot in 'Robusta Coffee in Brazil: Are these prices here to stay?'
Investing in Robusta
The Robusta market is still mostly driven by price, not quality. Considering Robusta coffee is currently riding on the high point of its cycle, there seems to be no better time to take advantage of improved margins to make the necessary investments to deal with the inevitable market volatility in the future.
Placing Robusta in the cooperative portfolio For improvements on a local level, it is worth exploring how to add Robusta to the portfolio of an Arabica coffee grower or cooperative. Robusta has a more stable annual production than the Arabica variety which has an ‘on and off year’ or biennial cycle. Growers could benefit from a more stable stream of revenues annually to offset the ‘off year’ characteristics of the Arabica variety.
Narrowing profit margins
Worldwide, the recent tight supply-demand balance has kept Robusta prices moving upwards, and has also narrowed the price difference with the Arabica coffee variety. These changes have certainly been positive for Robusta growers across the globe in the short term, providing farmers with a major boost in income.
Coffee drinkers in emerging markets
Recently, Robusta has been playing a major role in non-traditional coffee consuming countries. The largest coffee consumers are the United States and Brazil. However, in emerging markets with income constraints, demand has been mostly channeled to instant coffee and commodity grade roasted coffee, making Robusta an affordable choice.
Making tastier coffee
Historically, the Robusta variety has been used as a coffee blend filler and has traded at a fraction of the price as Arabica which has a more desirable taste. The undesirable flavour of Robusta is the result of poor handling and processing of the beans.
Therefore, roasters have responded to the growth in supply and the lower price of the variety by adopting steam cleaning and other technology that ultimately increases the percentage of Robusta used in coffee blends.
Farmers’ output
In the end, price dictates much of Robusta’s dynamics and positive results have certainly fueled interest in the still hand-picked Robusta beans. The recent margins achieved by Robusta farmers have been an indication of the benefits of higher yields, which lower unit costs and improve margins. Investments in crop care and the drying process, as well as stricter quality control by farmers should translate into an increase in efficiency and output in the coming years.