Global coffee prices fall to 11-year lows in July on ample supplies, larger crop estimate – ICO

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Coffee prices, which have fallen consistently over the course of coffee year 2017/18, with decreases recorded in seven out of the last ten months, fell by an average 2.9% to 107.20 US cents/lb in July 2018 — the lowest monthly average for July since 2007, the International Coffee Organization (ICO) said in its latest report.

The daily composite indicator moved within a range of 104.98 US cents/lb and 109.46 US cents/lb. The fall to 104.98 US cents/lb on 18 July was the first decline below 105 cents since 2 January 2014. Even with growing demand, ample supplies in 2017/18 and good prospects for a larger crop in coffee year 2018/19 are weighing heavily on coffee prices, the ICO said.

It said after a slight rise in May, prices for all group indicators fell for the second consecutive month in July 2018.

“The largest decrease occurred in the average price for Brazilian Naturals, which fell by 4% to 110.54 US cents/lb, followed by a decline of 3.3%, to 133.92 US cents/lb, for Colombian Milds. Other Milds decreased by 2.6%, to 130.60 US cents/lb, which narrowed the differential between Colombian Milds and Other Milds by 26.5%, to 3.32 US cents/lb,” the report said.

The monthly average Robusta price fell by 1.9%, to 84.42 US cents/lb. The average arbitrage in June, as measured on the New York and London futures markets, fell by 10%, to 38.50 US cents/lb. However, intra-day volatility of the ICO composite indicator price increased by 0.3 percentage points to 4.8% as intra-day volatility for all Arabica indicators increased while the volatility of Robusta fell by 1.4 percentage points to 4.1%, it added.

The ICO said that total exports in June 2018 amounted to 10.45 million bags, 2.6% higher than in the same month one year ago.

“Robusta exports saw an increase of 7.9%, to 3.95 million bags, while Arabica shipments fell by 0.4%, to 6.51 million bags. Exports of Colombian Milds grew by 1.1%, to 1.03 million bags, and Brazilian Naturals grew by 2.2%, to 2.61 million bags. However, shipments of Other Milds amounted to 2.87 million bags, 3.2% lower than in June 2017,” it said.

According to the ICO, total coffee exports for October 2017 through June 2018 were 0.3% higher than those in the same period one year ago. This growth was led by increased shipments of Robusta, which reached 33.8 million bags, 3.6% higher than one year ago. In contrast, Arabica shipments declined by 1.5% to 57.06 million bags in the first nine months of coffee year 2017/18.

Exports of Colombian Milds and Brazilian Naturals decreased by 6.1% to 10.48 million bags and 3.1% to 25.67 million bags, respectively. However, shipments of Other Milds are 3.1% higher at 20.91 million bags compared to one year ago.

Read full report here

Prashant has worked in the publishing industry for 17 years. His keen interest in commodities developed while working for organisations such as like Thomson Reuters, Wolters Kluwer & McGraw-Hill eventually brought him here. In his free time, Prashant consults with businesses in the digital space.

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