Coffee

ICO: COFFEE PRICES RISE AFTER THREE MONTHS OF DECLINE

Last Updated on August 19, 2021 by Nick Baskett

The International Coffee Organization (ICO) composite indicator increased in July 2020, by 4.7% to an average of 103.66 US cents/lb following three months of decline.

The daily composite indicator had a low of 98.59 US cents/lb on 10 July before rising to 114.25 US cents/lb on the last day of July.

Strengthening of the Brazilian Real in the second half of the month raised prices in July as well as concerns over temporary tightness in supply.

All coffee groups prices increased in July 2020, though the largest month-on-month increase occurred for Brazilian Naturals, which grew by 5.8% to 97.96 US US cents/lb.

Worldwide exports in June 2020 amounted to 10.57 million bags, 5.3% lower than June 2019, while shipments in the first nine months of coffee year 2019/20 reached 95.36 million bags, 5.1% lower than the same period last year.

Most of the coffee continues to be exported as green coffee, accounting for 90.4% of total coffee shipped between October 2019 and June 2020.

Soluble coffee shipments estimated for 9.1% of the total, an increase of 1 percentage point from one year ago, while roasted coffee shipments represented just 0.5%.

A 2.9% drop in global production to 168.01 million bags has contributed to the lower volume of shipments.

Arabica output is predicted to fall by 5.4% to 95.37 million bags, due to a decline in coffee production in seven of the ten largest Arabica producers. In contrast, Robusta production is predicted to increase by 0.5% to 72.63 million bags.

Source: ICO

Global coffee consumption is expected to increase by 0.3% to 168.49 million bags, which is beneath the average annual growth rate of 2.2% over the last two decades.

The ICO is expecting strong growth at the start of the season to be counteracted by a global economic slowdown.

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