ICO report shows lowest prices since 2013

The August 2018 coffee report from the International Coffee Organization (ICO) has recorded an international coffee prices average of 102.41 US cents per pound in August 2018, a 20.1 per cent drop compared to August 2017. This is the lowest the ICO composite indicator has been since November 2013, when it recorded 100.99 US cents per pound. Prices for all group indicators fell for the third consecutive month. The largest decrease occurred in the average price for Brazilian Naturals, which fell by 5.5 per cent to 104.46 US cents per pound, followed by a decline of 4.4 per cent to 80.74 US cents per pound for Robusta. The ICO links the decline primarily to market fundamentals, though it says other factors, such as exchange rate movements and futures markets, are also playing a role. In contrast to prices, world coffee consumption has steadily grown at an average annual rate of two per cent, increasing from 90.28 million bags in 1990/91 to an estimated 162.12 million bags in 2017/18. The ICO says production rates fluctuate while following an overall upward trend. Total exports in July 2018 increased by 4.6 per cent to 10.11 million bags, compared to 9.66 million in July 2017. Brazil’s July 2018 exports grew 24.2 per cent to 2.33 million, compared to July 2017. Vietnam’s exports reached an estimated 2.22 million bags, 20.7 per cent higher than in July 2017. Colombia’s exports rose by 7.5 per cent to 1.08 million bags in July 2018, compared to July 2017. In July 2018, Honduras shipped 0.69 million bags, 10.8 per cent lower than in July 2017. Indonesia’s exports are estimated 33.6 per cent lower, at 4.69 million bags for October 2017 through to July 2018. In July 2018, Ethiopia shipped 0.42 million bags, 15.6 per cent higher than in July 2017. Exports in the first 10 months of coffee year 2017/18 have increased by 0.9 per cent to 101.2 million bags, compared to 100.34 million bags in the same period in the last coffee year.