In March 2019, the International Coffee Organization (ICO) composite indicator fell by 3.1 per cent to 97.50 US cents per pound, the lowest monthly average of coffee prices since October 2006, when the price was 95.53 US cents per pound.
The ICO reports that price movements for all group indicators have fallen, contributing to the low composite indicator.
Prices for Brazilian Naturals decreased 4.2 per cent to 95.81 US cents per pound, which is the lowest price for this group since July 2006.
Colombian Minds declined 2.1 per cent to 125.23 US cents per pound with Other Minds fell 3.6 per cent to 123.89 US cents per pound.
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On the production side, Central America and Mexico is estimated to decline 0.5 per cent to 21.72 million bags, accounting for the fall in Other Milds group exports this coffee year.
Similarly, output in Asia and Oceania is estimated to decrease two per cent to 48.18 million bags, due to lower than expected yields.
Vietnam’s exports in February 2019 fell 22.7 per cent to 1.7 million bags compared to February 2018.
The ICO reveals that Africa’s production is to remain stable at 17.74 million bags, which is an increase of 1.4 per cent. This reflected growth is due to its shipments in the first five months of coffee year 2018/19, which doubled to 617,241 bags, reflecting the ample supply of coffee on the international market.
World production in coffee year 2018/19 is estimated at 168.05 million bags while consumption is estimated at 164.99 million bags, creating a surplus of 3.06 million bags. This follows a surplus of 4.16 million bags in coffee year 2017/18.
Prospects of a large off-year crop from Brazil and increased exports in each month of 2018/19 compared to the previous year are contributing to the sustained low prices.