ICO reports sharp decline in coffee prices in December

coffee prices

The International Coffee Organization (ICO) has revealed that coffee prices declined 8.2 per cent in December 2018.

In its 2018 market report, the ICO composite price indicator fell from 109.59 US cents (about $1.53) per pound in November to 100.61 US cents per pound in December.

The daily price fell as low as 97.59 US cents per pound on 18 December.

The ICO attributes the price decline to a surplus of coffee in coffee year 2018/19 (April 2018 to March 2019). It adds this will likely continue over the next few months.

The market report estimates global output at 167.47 million bags, which exceeds its expectations of world coffee consumption, at 165.18 million bags. However, at 2.29 million bags, the surplus for 2018/19 is projected to be one million bags less than in 2017/18 given the stronger growth in demand.

The International Coffee Organization (ICO) has reported that coffee prices declined 8.2 per cent in December 2018.

In its 2018 market report, the ICO composite price indicator fell from 109.59 US cents (about $1.53) per pound in November to 100.61 US cents per pound in December. The daily price fell as low as 97.59 US cents per pound on 18 December.

The ICO attributes the price decline to a surplus of coffee in coffee year 2018/19 (April 2018 to March 2019). It adds this will likely continue over the next few months.

The market report estimates global output at 167.47 million bags, which exceeds its expectations of world coffee consumption, at 165.18 million bags. However, at 2.29 million bags, the surplus for 2018/19 is projected to be one million bags less than in 2017/18 given the stronger growth in demand.

Prices for all group indicators declined in December 2018, with the largest decreases for Brazilian Naturals and Colombian Milds, which fell by 9.9 per cent to 102.10 US cents per pound and by 8.2 per cent to 127.86 US cents per pound, respectively.

Other Milds decreased by 7.3 per cent to 127.10 US cents per pound, reducing the differential with Colombian Milds to just 0.76 US cents per pound in December 2018. Robusta fell by 7.1 per cent to 77.57 US cents per pound. 

Brazil’s coffee production is estimated to reach 61.7 million bags in 2018/19. The ICO says Brazil will remain the world’s largest coffee producer in coffee year 2019/20, with output estimated at 58.5 million bags. 

Vietnam’s production is estimated down 3.4 per cent at 29.5 million bags in 2018/19 as lower level of inputs and poor weather damaged yields. 

Colombia’s production is estimated at 14.2 million bags for coffee year 2018/19, following a harvest of 13.82 million bags in 2017/18. 

Indonesia’s output is estimated at 10.2 million bags, 5.6 per cent less than in 2017/18. 

Ethiopia’s output in 2018/19 is estimated at 7.5 million, up 0.6 per cent from 2017/18. The ICO says Ethiopia has grown steadily since 2012/13. 

Production in Honduras this year is estimated to be 1.5 per cent lower at 7.45 million bags. This decline follows four consecutive seasons of growth. The ICO attributes the decline to rising costs, particularly labour, and an environment of low prices. 

Excessive rains and flooding impacted India’s 2018/19 harvest, which is estimated down 10.5 per cent to 5.2 million bags. 

World coffee exports reached 9.88 million bags in November 2018, compared with 9.35 million in November 2017, an increase of 5.7 per cent. 

Prices for all group indicators declined in December 2018, with the largest decreases for Brazilian Naturals and Colombian Milds, which fell by 9.9 per cent to 102.10 US cents per pound and by 8.2 per cent to 127.86 US cents per pound, respectively.

Other Milds decreased by 7.3 per cent to 127.10 US cents per pound, reducing the differential with Colombian Milds to just 0.76 US cents per pound in December 2018. Robusta fell by 7.1 per cent to 77.57 US cents per pound. 

Brazil’s coffee production is estimated to reach 61.7 million bags in 2018/19. The ICO says Brazil will remain the world’s largest coffee producer in coffee year 2019/20, with output estimated at 58.5 million bags. 

Vietnam’s production is estimated down 3.4 per cent at 29.5 million bags in 2018/19 as lower level of inputs and poor weather damaged yields. 

Colombia’s production is estimated at 14.2 million bags for coffee year 2018/19, following a harvest of 13.82 million bags in 2017/18. 

Indonesia’s output is estimated at 10.2 million bags, 5.6 per cent less than in 2017/18. 

Ethiopia’s output in 2018/19 is estimated at 7.5 million, up 0.6 per cent from 2017/18. The ICO says Ethiopia has grown steadily since 2012/13. 

Production in Honduras this year is estimated to be 1.5 per cent lower at 7.45 million bags. This decline follows four consecutive seasons of growth. The ICO attributes the decline to rising costs, particularly labour, and an environment of low coffee prices. 

Excessive rains and flooding impacted India’s 2018/19 harvest, which is estimated down 10.5 per cent to 5.2 million bags. 

World coffee exports reached 9.88 million bags in November 2018, compared with 9.35 million in November 2017, an increase of 5.7 per cent.