Starbucks Has Brazil to Thank for Longest Coffee Rout Since 2001

(Bloomberg) -- News out of Brazil just keeps getting better for Starbucks Corp. and other buyers of smooth-tasting arabica-coffee beans.

Favorable weather and currency weakness in the South American country are behind a sixth straight quarterly decline in arabica prices. In fact, coffee futures are posting a string of superlatives.

• The run of quarterly losses is the longest since late 2001
• The quarterly average price is the lowest since 2005, and the lowest in 15 years for a first quarter
• A more than 7 percent drop this year is the worst performance among major soft commodities tracked by Bloomberg

The world’s biggest coffee-shop company has abundant rains to thank for cheaper prices. The beneficial weather is boosting prospects for the next harvests in top supplier Brazil. In addition, waning optimism that the government will be able to push through market-friendly legislation is taking its toll on Brazil’s currency, giving exporters more incentive to ship beans.

--With assistance from Millie Munshi.

To contact the reporter on this story: Fabiana Batista in Sao Paulo at fbatista6@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Patrick McKiernan

©2019 Bloomberg L.P.