The International Coffee Organization (ICO) composite indicator decreased by 4.1 per cent to an average of 104.45 US cents per pound in May 2020. This marks the second consecutive month of decrease.
The daily price of the ICO composite indicator reached a high of 107.29 US cents per pound on 11 May, and then declined over the next two weeks reaching a low of 98.68 US cents per pound on 29 May. Expectations of a larger output from Brazil’s 2020/21 crop, the harvesting of which is underway, and ongoing bearish expectations for demand put downward pressure on prices in May.
While all Arabica groups trended downward in May 2020, the Robusta group indicator rose by 0.9 per cent to 64.53 US cents per pound.
The volatility of the ICO composite indicator decreased by 2.9 percentage points to 7.7 per cent over the past month.
In April 2020, world exports reached 10.82 million bags, 3.1 per cent lower than the 11.17 million bags exported in April 2019.
Global shipments in the first seven months of coffee year 2019/20 fell by 3.8 per cent to 72.78 million bags. Exports from Africa increased by 7 per cent to 7.66 million, and from Asia and Oceania rose by 0.6 per cent to 23.62 million bags in October 2019 to April 2020.
During the same period, shipments from Central America and Mexico declined by 4.9 per cent to 8.77 million bags and from South America by 8.6% to 32.74 million bags.
In 2019/20, world coffee consumption is estimated at 166.06 million bags, 0.5 per cent higher than in 2018/19.
Although several countries have started to slowly reopen non-essential activities, the ICO anticipates out-of-home coffee consumption to remain weak for some time. Additionally, it says job losses could lower demand, particularly for non-habitual consumers.
Production in 2019/20 is estimated at 167.91 million bags, which could exceed consumption by 1.85 to 3.42 million bags, depending on impact of COVID-19.
For more information, visit www.ico.org
