According to the International Coffee Organization (ICO) January market report, the ICO composite indicator continued to climb in January 2021, averaging 115.73 US cents per pound, 0.9 per cent higher than last month.
The daily composite indicator fell to a low of 113.01 US cents per pound on 12 January before rebounding to a high of 118.19 US cents per pound on 15 January.
The daily price remained at a similar level in the second half of the month, ranging between 114.82 and 117.71 US cents per pound. Prices in January were supported by weather concerns over Brazil’s next off-year Arabica crop in 2021/22 and the impact of the hurricanes in Central America.
Prices for all Arabica indicators rose in January, while Robusta prices decreased by 1.8 per cent to 70.71 US cents per pound.
Exports in the first three months of coffee year 2020/21 were 31.59 million bags, 6.1 per cent higher than in October to December 2019.
In 2019/20 global coffee production is estimated at 168.68 million bags, 0.9 per cent lower than the previous year due largely to the decline in Arabica production from Brazil. In coffee year 2020/21, global production is estimated to rise by 1.9 per cent to 171.9 million bags with Arabica production growing by 5.2 per cent to 101.88 million bags.
World coffee consumption is projected to increase by 1.3 per cent to 166.63 million bags in 2020/21 as social distancing measures remain in place, limiting out-of-home consumption, and the global economy slowly recovers.
While demand is expected to recover, the expected increase in global production could lead to a projected surplus of 5.27 million bags at the end of coffee year 2020/21.
While current projections would negatively impact prices this year, the covid-19 pandemic remains an unprecedented and swiftly evolving situation.