International Coffee Organization’s composite coffee price continues slide

The International Coffee Organization’s  (ICO) monthly market report for October has revealed that the organisation’s composite indicator price has fallen to 107.03 US cents per pound, its lowest in 54 months. Furthermore, in real terms, the composite indicator is now below its level of January 2000, which marked the beginning of the period known as the coffee crisis. This continues the trend of decline in global coffee prices since 2011. The ICO said there can be no doubt that in many countries the prices received by coffee growers fail to cover the unit costs of production, while at the same time the prices of basic goods, such as food and energy, are rising. Indeed, coffee is the worst performing agricultural commodity of the past two years, with a downward trend that has so far shown no sign of improving, the report said.  All four group indicators fell sharply over the course of the month.  Colombian Milds dropped by 3.4 per cent, Other Milds by 2.7 per cent and Brazilian Naturals by  2.7 per cent, to their  lowest  levels since December 2008, March 2009  and July 2009 respectively.  The most significant decline  was observed  in  Robustas,  which  fell  by  4.6 per cent  to 83.70 US cents per pound, their lowest level in three years. However, despite a slight decrease in September, total exports for coffee year 2012-13 reached a record volume of 110.2 million bags.  Total production in 2012/13 is also estimated at a record volume of 145.2 million bags. The most dynamic growth over the last few years has been in exports of Robustas, which reached a record 41.7 million bags, accounting for 37.8 per cent of the world total, and 2.1 per cent higher than 2011-12.  This increase was despite a decrease in exports from the largest origin of Robustas. Vietnam, which fell by 7.2 per cent to an estimated 19.7 million bags. However, this was more than offset by a strong increase of Robusta exports from Indonesia, which rose by 40.2 per cent to a record volume of 8.4 million bags.  Uganda also registered a notable increase of 45.4 per cent in its Robusta exports to 2.8 million bags, compared to 1.9 million in 2011/12. World consumption is estimated at 142 million bags for calendar year 2012, and growing at around 2.4 per cent per annum, the ICO said.