International coffee prices reach highest average since 2017

international coffee prices

In February 2021, the International Coffee Organization (ICO) composite indicator continued its upward trend, increasing 3.1 per cent to an average of 119.35 US cents per pound as prices for all group indicators rose.

This is the highest monthly average since October 2017 when the ICO composite indicator reached 120.01 US cents per pound.

The daily composite indicator remained stable in the first half of the month, reaching a low of 115.07 US cents per pound on 15 February. However, in the final week of the month, prices rose sharply and reached a high of 128.34 US cents per pound on 25 February.

The ICO says prices in February were supported by tightening supplies, well as expectations of a deficit in the next season due to high temperatures and low rainfall in Brazil. Commodities, by and large, have been rallying as markets continue to factor in vaccine-related optimism and recent container shortages.

In coffee year 2020/21, global production is estimated to rise by 1.9 per cent to 171.9 million bags with Arabica production growing by 5.2 per cent to 101.88 million bags. World coffee consumption is projected to increase by 1.3 per cent to 166.63 million bags in 2020/21 as social distancing measures remain in place, limiting out-of-home consumption, and the global economy recovers at a slow pace.

Coffee year 2020/21 is projected to end with a surplus of 5.27 million bags as growth in supply outpaces demand.

Global exports in January 2021 totalled 10.21 million bags, compared with 10.59 million bags in January 2020, and shipments in the first four months of coffee year 2020/21 increased by 3.7 per cent to 41.88 million bags.

Exports from the world’s largest coffee-producing region, South America, increased by 15.5 per cent to 23.26 million bags as shipments from Brazil grew by 24.3 per cent to 16.77 million bags. However, exports from the other three regions declined from October 2020 to January 2021.

Shipments from Asia and Oceania decreased by 3.9 per cent to 12.19 million bags. Africa’s exports decreased 13 per cent to 3.81 million bags as shipments from three of the region’s five largest producers declined.

Shipments from Central America and Mexico fell by 17.5 and to 2.62 million bags as parts of the region were severely affected by hurricanes Iota and Eta.

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