ICO: Composite coffee price monthly average down 1.7% month-over-month to US$1.5768/lb. in May, driven by decline in arabica prices; coffee shipments from exporting countries totals 8.8 million bags in March
June 14, 2012
– Arabica prices declined further in May compared with their levels in April while Robusta prices recorded a significant rise, triggering a narrowing in the differential between the two types of coffee. As a result, the monthly average of the ICO composite indicator price fell by 1.7% from 160.46 US cents/lb in April to 157.68 in May. This is the lowest level recorded since August 2010. Moreover, price volatility increased only in the case of Robustas.
In terms of market fundamentals, total production of all exporting countries in crop year 2011/12 is estimated at around 131.9 million bags compared with 134.2 million bags in 2010/11. For crop year 2012/13 the second estimate of Brazilian production forecasts a crop of at least 50.4 million bags, an increase of 16% in relation to the previous crop year. Production increases are also expected in other exporting countries, encouraged by the performance of coffee prices in recent years. Far more precise information is needed to establish initial estimates of total production in crop year 2012/13. Nonetheless, the current buoyancy of world consumption should make it possible to maintain a balance between supply and demand. A brief analysis of consumption during the last 22 years is included in this report.
Exports by all exporting countries during April 2012 totalled 8.8 million bags, bringing the cumulative total for the first seven months of coffee year 2011/12 (October 2011 to April 2012) to 60.3 million bags as against 62.8 million bags for the same period in 2010/11, a fall of 4%. The drop in total exports during the first seven months of coffee year 2011/12 is attributable to the reduction in Arabica exports, particularly Colombian Milds and Brazilian Naturals.