According to the International Coffee Organization (ICO) August 2019 market report, the ICO composite indicator of August coffee prices hit 96.07 US cents per pound, a 6.7 per cent drop form July 2019.
This marks a 13.6 per cent drop from the start of the coffee year, October 2018, at 111.21 US cents per pound.
In August, the daily composite indicator ranged between a low of 94.29 US cents per pound on 19 August and a high of 97.43 US cents per pound on 8 August.
The ICO says across coffee year 2018/19, its daily composite indicator has averaged 100.72 US cents per pound.
Total exports in July 2019 amounted to 11.34 million bags, 9.5 per cent higher than July 2018 while shipments in the first ten months of coffee year 2018/19 reached 109.41 million bags, 10.2 per cent higher than the same period last year.
The ICO says ample supplies from a 3.9 per cent increase in global production to 169.73 million bags have fuelled exports.
The majority of coffee continues to be exported as green coffee, accounting for 91.3 per cent of total coffee shipped between October 2018 and July 2019.
Mexico, Colombia, Vietnam, Brazil, and the Dominican Republic represent the five largest exporters of roasted coffee among producing countries, accounting for 92.7 per cent of total roasted coffee exports in the first ten months of coffee year 2018/19.
Brazil was the largest exporter of soluble coffee in October 2018 to July 2019, with shipments reaching 3.29 million bags, 10.7 per cent higher than the same period one year ago.
The ICO says while the share of processed coffee has not changed much in the last three decades, processing coffee at origin can add value, as evidenced by the higher unit values for processed coffee compared to those for green coffee.
For example, processing green coffee can double the unit value for Brazil’s exports, while the unit value for Colombia’s processed coffee is around 60 to 75 per cent greater than those for green coffee.
Global coffee demand is estimated to grow by 2.1 per cent to 164.77 million bags, with growth in Asia, Oceania, and Africa outpacing other regions. However, 2018/19 is estimated to end with a surplus of 4.96 million bags, making it the second consecutive year of surplus.
The ICO says the cumulative oversupply over the last two seasons is estimated at seven million bags, attributing this to current low coffee price levels.
For more information, visit www.ico.org