Coffee prices continue to decline in February

Thursday 5th, March 2020.

According to the International Coffee Organization (ICO) February 2020 Coffee Market Report, coffee prices continued to decline in February.

After price drops in January, the ICO composite indicator fell a further 4.6 per cent, averaging 102 US cents per pound. The daily price of the ICO composite ranged between 97.73 US cents per pound on 4 February and 106.34 US cents per pound on 28 February

The ICO says fears over the effect of Covid-19 might have on demand, particularly for out-of-home consumption, as well as ample supplies for the remainder of the year, given Brazil’s 2020/21 crop is in the on-year of its biennial Arabica cycle, exerted pressure on the market.

There was a similar downward trend for all group indicators in February 2020, with Brazilian Naturals decreasing 7.3 per cent to 102.62 US cents per pound. Other Milds fell 4.7 per cent to 135.5 US cents per pound and Colombian Milds decreased 0.7 per cent to 146.43 US cents per pound.

As a result the differential between Colombian Milds and Other Milds widened further in February, more than doubling to 10.93 US cents per pound. Prices for Robusta decreased by 3.5 per cent month-on-month to 68.07 US cents per pound.

Global exports in January 2020 totalled 10.29 million bags, compared to 11.14 million bags in January 2019.

Over the first four months of the coffee year 2019/20, exports decreased 5.8 per cent to 39.53 million bags compared to 41.95 million bags in 2018/19. During this period shipments of Brazilian Naturals declined 11.8 per cent to 13.28 million bags and Other Milds decreased 6.6 per cent to 6.46 million bags.

Exports of Colombian Milds however, have increased 0.6 per cent to 5.27 million bags from October 2019 to January 2020.

In 2019/20 world coffee production is estimated at 168.86 million bags, a decrease of 0.8 per cent on 2018/19. Arabica production during this period is estimated to decline 3.9 per to 96.37 million bags, while Robusta is estimated to grow 3.7 per cent higher to 72.5 million bags.

The ICO adds Covid-19 presents a considerable downside risk to global coffee consumption.

 

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