ICO Coffee Report shows continued price decline

The March 2018 Coffee Market Report from the International Coffee Organization (ICO) shows the market continues to decline. Since August 2017, the ICO composite indicator price has declined in each month except January 2018. The composite indicator decreased by 1.1 per cent in March 2018 to an average of 112.99 US cents per pound, which is the lowest monthly price since February 2016. The monthly average of the ICO composite indicator continued its downward trend in March 2018, decreasing by 1.1 per cent to 112.99 US cents per pound. The daily composite indicator started the month at a high of 115.23 US cents per pound, but generally fell during the rest of the month. It reached a low of 110.73 US cents per pound on 23 March 2018. Aside from 12 December 2017, this was the lowest daily value for the ICO composite indicator since 2 March 2016. Indicator prices for all groups fell in March 2018, though the largest month‐on‐month decrease occurred for Colombian Milds, which fell by 1.4 per cent to 139.45 US cents per pound. This narrowed the price differential between Colombian Milds and Other Milds to an average of 4.42 US cents per pound, 15.3 per cent lower than last month. The monthly average for the Robusta group decreased by 1.2 per cent to 88.18 US cents per pound, reversing the slight upward movement in February 2018. The average arbitrage in March, as measured on the New York and London futures markets, fell by 3.8 per cent to 41.80 US cents per pound, which is the lowest level since July 2017. Additionally, intra‐day volatility of the ICO composite indicator price decreased by 0.9 percentage points to 4.3 per cent. Global production is estimated at 159.66 million bags in 2017/18, 1.2 per cent higher than 2016/17, resulting in an estimated surplus of 0.78 million bags. Arabica production is estimated 4.6 per cent lower at 97.43 million bags while Robusta is estimated 12.1 per cent higher at 62.24 million bags. The surplus in production is reflected in increased shipments for all groups, except Colombian Milds, during the first five months of coffee year 2017/18.