Global coffee prices rose for the 17th straight month in February, the International Coffee Organization (ICO) said, as the Ukraininan war erupted and raised market uncertainties. The ICO Composite Indicator Price (CIP) rose to 210.89 US cents/lb, a 3.2%, increase month-on-month, in February 2022, it said.
While Russia and Ukraine consumed 6.26 million 60-kg bags of coffee, accounting for a mere 3.8% of the global consumption, there are fears that the Russian invasion of Ukraine might impact fertilizer prices and increase input costs.
“Russia supplies 20% of the global seaborne ammonia market and disrupted supplies could impact the price of fertilizers, which ultimately could determine higher input costs for coffee farmers from around the world, and to higher coffee prices,” ICO said in its latest monthly report.
It said coffee exporters are already starting to face logistical difficulties, with an exporter reported as having several containers of Honduran coffee stranded in international waters. Moreover, the global economic outlook for 2022 has already been cut by some public and private institutions, including the International Monetary Fund.
“However, it is too early to fully assess the impact of the conflict on the coffee markets of Russia and Ukraine, and on the global coffee industry, the ICO added.
Global exports in January 2022 totaled 10.86 million bags, as compared with 10.64 million bags in January 2021. Total exports of roasted coffee in the coffee year 2021/22 grew by 18.8%, year-on-year, from 238,000 bags to 282,000 bags. Shipments of soluble coffee totaled 4.24 million bags, up from 3.81 million bags for the same time during the previous coffee year. The share of green exports lost 0.7 percentage points as the total share of roasted exports grew by 0.1 percentage points and the share of soluble grew 1.1 percentage points, ICO said.
Exports from Africa in the first four months of coffee year 2021/20 increased by 2.4% to 4.04 million bags, while it increased by 20.7% to 14.69 million bags in October 2021 to January 2022 for Asia & Oceania, it said.
Compared to the first four months of coffee year 2021/22, exports from Mexico & Central America grew by 24.1% to 3.11 million, when compared with 2.50 million bags for the same period in coffee year 2020/21. South America’s exports decreased by 16.1% to 20.00 million bags in the four months of coffee year 2021/22, the ICO added.