Arabica prices drop in February while Robusta prices rise: ICO

Arabica prices slipped in February while Robustas increased by a similar amount, according to the International Coffee Organisation's (ICO) monthly report.     The result from the mixed price performance was a sharp narrowing of the differential between the two. The ICO reported that its composite indicator fell to US$182.29 cents/pound compared to $188.90 in January, representing a drop of 3.5 per cent. The organisation noted that the price indicator has fallen every month since the start of the coffee year. This monthly average is also 15.6 per cent lower than February 2011 and 13.4 per cent lower than the 2011 average. “Indeed, the prices of all four groups of coffee are lower than they were 12 months ago,” the report noted. “This downward correction was particularly marked in the case of Arabica, with the New York futures market at its lowest level since November 2010.” The depreciation of the US dollar, notably against the Brazilian real, the Colombian peso, the Indian rupee, the Indonesian rupiah, and the Vietnamese dong, was said to have accentuated the impact of downward price corrections. Overall, the ICO anticipates a strong outlook for consumption. “Demand in traditional importing countries has remained resilient to the global economic downturn and consumption in exporting countries and emerging markets has proved dynamic with strong potential for further growth,” the report stated. “Moreover, stocks in exporting countries need to be replenished since they are at their lowest levels on
record.” EExports by all exporting countries in January 2012 was reported at 8 million bags, bringing the cumulative total for coffee year 2011/12 (October 2011 to January 2012) to 32.6 million bags as against 33.6 million bags for the same period in coffee year 2010/11. These figures represent a decrease of 3 per cent.