Uncertainty over 2014/15 crop drives prices higher: ICO

Coffee prices surged higher in January, with the monthly average of the International Coffee Organization’s (ICO) composite indicator price at its highest level in four months. The monthly average of  the  ICO  composite  indicator rose by 3.9% in January 2014 to 110.75 US cents per pound. The composite increased consistently over the course of the month, starting at a low of 104.52 and finishing on a high of 117.56, an increase of 12.5 per cent. The ICO group indicators underwent more mixed fortunes, with the three Arabica groups all increasing significantly while Robustas fell slightly. The recent publication of official Brazilian production estimates for crop year 2014/15, which is due to start in April, suggests that output could fall for the second consecutive crop year, giving an initial forecast of between 46.53 and 50.15 million bags. This uncertainty over the 2014/15 crop, exacerbated by notably dry weather in some coffee‐producing regions, has given support to coffee prices over the past
Month, the ICO says. Based on the information currently available, total production for crop year 2013/14 is provisionally estimated at around 145.8 million bags, representing a slight increase on the 145.1 million bags produced in 2012/13. Finally, total exports in calendar year 2013 amounted to 108.9 million bags, down 1.8 per cent on calendar year 2012, the report states.