According to the International Coffee Organization (ICO) December 2019 Coffee Market Report, prices for all Arabica indicators rose in December, while Robusta prices decreased 0.1 per cent to 73.22 US cents per pound.
The ICO composite indicator continued to rise in December 2019, ranging between 111.80 and 123.69 US cents per pound. The lowest point was still higher than any of the monthly averages in the previous 18 months.
The daily price of the ICO composite indicator averaged 117.37 US cents per pound in December, an increase of 9.5 per cent from November. This is the highest monthly average since October 2017, when it reached 120.01 US cents per pound.
Exports from Brazil have slowed in the past few months compared to a year ago, while harvests from some origins with an October to September crop year were delayed. The ICO says firm demand and tightening of supply have helped put upward pressure on prices.
Exports in the first two months of coffee year 2019/20 declined by 10.8 per cent to 18.3 million bags. Exports from all coffee groups decreased during this period, except Colombian Milds, which rose by 2.2 per cent to 2.6 million bags
Global coffee output is estimated at 168.71 million bags in 2019/20, 0.9 per cent lower than last year, as Arabica production is estimated to decline by 4.1 per cent to 96.22 million bags while Robusta grows by 3.7 per cent to 72.5 million bags.
In crop year 2019/20, Brazil’s total production is estimated at 57 million bags, which is 12.2 per cent lower than the prior year.
Production in Vietnam is expected to grow by 4.4 per cent to 31.2 million bags in crop year 2019/20.
Colombia is the world’s second largest producer of Arabica, and its harvest in 2019/20 is forecast to reach 14.1 million bags, 1.7 per cent higher than in 2018/19.
In coffee year 2019/20, coffee consumption is estimated to increase by 1.24 million bags to 169.34 million bags. This would result in a deficit of 0.63 million bags in 2019/20, which the ICO says also puts upward pressure on prices.
However, this may be limited as more of the 2019/20 crop enters the market. A larger crop is also anticipated from Brazil in its 2020/21 crop year, commencing in April.
For more information, visit www.ico.org
