Global coffee production in 2019/20 is estimated at 169.34 million bags, 2.2 per cent lower than last year, according to the International Coffee Organization (ICO) September Coffee Market Report.
Output of Arabica decreased by 5 per cent to 95.99 million bags, while that of Robusta rose by 1.9 per cent to 73.36 million bags.
World coffee consumption is expected to decrease by 0.5 per cent to 167.81 million bags as the COVID-19 pandemic continues to put pressure on the global economy and greatly limits out-of- home coffee consumption.
As a result, coffee year 2019/20 is seen ending in a surplus of 1.54 million bags. This compares to a surplus of 4.4 million bags in 2018/19.
The two consecutive surpluses have limited a recovery in prices, which remain below the long-term average of 135.34 US cents per pound between 2007 and 2018.
The ICO composite indicator in September rose by 1.3 per cent to 116.25 US cents per pound. It averaged 107.25 US cents per pound in coffee year 2019/20, 6.7 per cent higher compared to 2018/19. All group indicator prices rose in September 2020 for the third consecutive month, with the largest increase occurring for Other Milds.
The monthly average of the ICO composite indicator rose by 1.3 per cent to 116.25 US cents per pound in September 2020.
While prices have increased, the ICO says they remain low compared to the long-term average of 135.34 US cents per pound between 2007 and 2018.
The daily composite indicator started on US cents per pound a high note, remaining above 120 US cents per pound until 14 September, when it fell to 116.97 US cents per pound. It continued to fall during the rest of the month, reaching a low of 108.09 US cents per pound on 29 September. The Brazilian real also fell from mid- to late-September, erasing the gains made over the preceding three weeks.