Global coffee production inched up in 2015, prices still pressured – ICO

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Global coffee production inched up slightly in 2015, but a 15-month long downward pressure refused to cease in December though the rate of declined slowed, the International Coffee Organisation (ICO) said.

“The coffee market fell again in December 2015, reaching its second lowest monthly average of the year. This decrease was entirely attributable to the drop in Robusta prices over the course of the month,’ it said in its latest monthly report.

ICO estimated coffee production in crop year 2015/16 to come in at 143.4 million bags, a slight 1.4% recovery compared to 2014/15, which has been revised lower to 141.4 million.

“Lower production in Brazil as estimated by Conab has been compensated by increases provisionally estimated in Vietnam, Colombia and Indonesia, among others,” it said.

The downward trend in the coffee market over the last 15 months continued in December, although the rate of decline slowed. The monthly average of the ICO composite settled on 114.63 US cents/lb, down by 0.3 percent compared to November. This is nearly 24 percent lower than its level in December 2014, albeit 7.6 percent higher than December 2013.

ICO said the Brazilian coffee agency Conab has updated its estimate of output in 2015/16 from 42.1 million bags to 43.2 million, which is still down from the revised 2014/15 figure of 45.6 million bags. This would be Brazil’s smallest crop since 2009/10. The Robusta crop is the most affected, down by 14.2 percent to 11.2 million bags, while Arabica is down by 1.7 percent to 32 million bags.

Production in Vietnam has been revised down to 26.5 million bags for 2014/15, given the low exports recorded over the course of the year, although this would still imply a significant stock build up. Output in the current crop year is provisionally estimated to increase to 27.5 million bags.

Output in Colombia continues to increase, with production in the first quarter of 2015/16 already 25.5 percent higher than the same period last year. Total production in 2015/16 is provisionally estimated at 13.5 million bags, although if the current trend continues this could be revised higher.

In Indonesia, an increase of 6.1 percent to 11 million bags is provisionally expected, while Ethiopia is estimated down 3.4 percent to 6.4 million bags.

The Coffee Board of India has indicated in its post-monsoon forecast that it expects production to increase by 7 percent to 5.8 million bags, with a similar increase expected in Honduras to 5.8 million bags.

 

 

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