According to the International Coffee Organization (ICO) March 2020 Coffee Market Report, prices for all Arabica group indicators increased due to concerns over the availability of that type of coffee.
Brazilian Naturals increased by 10 per cent to 112.87 US cents per pound, Other Milds by 9.5 per cent to 148.33 US cents per pound, and Colombian Milds by 8.6 per cent to 158.99 US cents per pound.
The differential between Colombian Milds and Other Milds narrowed by 2.5 per cent to 10.66 US cents per pound, after more than doubling in February 2020.
This increased demand was not reflected in Robusta, where prices fell by 0.9 per cent to 67.46 US cents per pound.
The New York Arabica futures market rose by 8.8 per cent to an average of 116.09 US cents per pound, while the London Robusta futures market declined by 2.8 per cent to 57.39 US cents per pound.
As a result, the spread between Arabica and Robusta coffees, as measured on the two futures markets, increased to 58.7 US cents per pound, which is 11.03 US cents per pound higher than in February.
After two months of decrease, the ICO composite indicator reversed its downward trend, rising by 6.9 per cent to 109.05 US cents per pound. This is the second highest monthly average in coffee year 2019/20.
The daily price of the ICO Composite ranged between 103.22 US cents per pound on 17 March and 117.41 US cents per pound on 25 March.
The ICO says concerns over disruptions to the supply chain – as March is usually a month of lower stock on-hand in countries with crop years commencing in April, particularly Brazil – pushed prices higher.
Global exports in February 2020 totalled 11.11 million 60-kilogram bags, compared with 10.83 million bags in February 2019, but shipments in the first five months of coffee year 2019/20 decreased by 3.4 per cent to 50.97 million bags.
In 2019/20, world coffee consumption is estimated at 169.34 million bags, 0.7 per cent higher than in 2018/19 as COVID-19 presents considerable downside risk to global coffee consumption.
Currently, the ICO estimates demand to exceed production – projected at 168.86 million bags – by 0.47 million bags in coffee year 2019/20. However, the situation is evolving quickly and impacting both supply and demand.
The ICO Secretariat is closely monitoring the situation and will keep its Members and the wider coffee sector informed as new information and analysis becomes available.
