November coffee prices rise on concerns over 2021 production

November coffee prices

In November, the International Coffee Organization (ICO) composite indicator rose by 3.6 per cent to 109.70 US cents per pound, following an 8.9 per cent decline in coffee prices in October 2020.

The daily composite indicator ranged between 103.77 US cents per pound and 108.72 US cents per pound in the first two weeks of the month. In the second half of the month, however, it reached a low of 110.22 US cents per pound on 24 November and a high of 116.17 US cents per pound on 27 November.

The ICO says a delayed start to Vietnam’s harvest, concerns over the prolonged drought in Brazil, and the damage caused by hurricanes Iota and Eta in Central America boosted prices in November, though the bearish outlook for the global economy limited further recovery.

Global exports in October 2020, the first month of coffee year 2020/21, totalled 9.67 million bags, which represents an increase of 3.2 per cent compared to October 2019. The depreciation of the Brazilian Real against the US Dollar is a contributing factor for higher shipments of Brazilian Naturals while Robusta shipments are bolstered by sustained demand for soluble coffee.

For the first ten months of 2020, total exports are 3.8 per cent lower at 107.08 million bags, compared to 111.28 million for the same period last year. Shipments for all groups declined, with the exception of Brazilian Naturals, which rose by 1 per cent to 33.65 million bags.

World coffee production in coffee year 2019/20 decreased by 1.6 per cent to 168.55 million 60-kilogram bags. Arabica output declined 5.1 per cent to 95.73 million bags, while Robusta production rose by 3.2 per cent to 72.82 million bags.

South America’s production fell by 4.6 per cent to 78.87 million bags, due largely to the decline in Brazil’s Arabica output in the off year of the biennial crop cycle. Production from Asia and Oceania grew by 4.1 per cent to 50.07 million bags, due largely to the recovery of output in Indonesia and Vietnam. Production in Central America & Mexico declined by 4.5 per cent to 20.76 million bags, while Africa’s output remained stable at 18.86 million bags.

World coffee production exceeded global consumption by 961,000 bags as world coffee demand decreased by 0.9 per cent to 167.59 million bags.

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