The Colombian Milds and Other Milds decreased by 0.8% and 0.6%, reaching 277.10 and 276.82 US cents/lb, respectively, in October 2024. The Brazilian Naturals also depreciated, decreasing by 0.5% to 255.85 US cents/lb in October 2024. The Robustas contracted 8.3% to 221.93 US cents/lb. The New York and London ICE markets were drivers of the contraction, decreasing by 1.3% and 8.2% and reaching 250.62 and 207.11 US cents/lb, respectively.

On 2 October, a press release was published saying that the European Commission “strengthens support for EU Deforestation Regulation implementation and proposes extra 12 months of phasing-in time, responding to calls by global partners.” The news had a bearish impact on the I-CIP, with a market reaction driving the price to 245.29 US cents/lb by 7 October from 263.96 US cents/lb on 1 October. On 16 October, the Council agreed on its position on the targeted amendment of the EU Deforestation Regulation, postponing its date of application by 12 months. As a result, if agreed by the European Parliament, the obligations stemming from this regulation will be binding from 30 December 2025 for large operators and traders and from 30 June 2026 for micro- and small enterprises. The news of the agreement by the Council appears to have further added to the downward momentum of the I-CIP, which steadily fell throughout the remainder of the month, closing October at 242.25 US cents/lb. The Brazilian Real was an additional downward factor on the I-CIP, which reached a 3.5 year low against the dollar at 5.81 BRL to 1 USD on 31 October.

The Colombian Milds–Other Milds differential shrank from 0.75 to 0.28 US cents/lb between September and October 2024. The Colombian Milds–Brazilian Naturals differential contracted by 3.5% to 21.25 US cents/lb, whilst the Colombian Milds–Robustas differential expanded by 48.3% from September to October 2024, averaging 55.17 US cents/lb. Meanwhile, the Other Milds– Brazilian Naturals and Other Milds–Robustas differentials moved by -1.5% and 50.6% to 20.97 and 54.89 US cents/lb, respectively. The Brazilian Naturals–Robustas differential grew by 123.6%, averaging 33.92 US cents/lb in October 2024.

The arbitrage, as measured between the London and New York futures markets, expanded 54.2% to 43.50 US cents/lb in October 2024, marking its highest point in four months. This trend reversal could signal how the market is reacting to longer term higher Robusta prices, where the downward adjustment of the Robustas seems to be stronger in relation to the Arabicas, reflecting that the Robustas may have been overvalued. Furthermore, in September 2024, the Robustas grew month-on-month at a much faster rate than the Arabicas – 12.8% versus 6.2% – thereby permitting a more aggressive downward adjustment.

The intra-day volatility of the I-CIP expanded by 0.5 percentage points, averaging 11.0% in October 2024. The Colombian Milds’ volatility increased by 0.6 percentage points. The Other Milds’ volatility grew by 0.4 percentage points to 11.4% while the Brazilian Naturals followed the same uptrend, gaining 0.7 percentage points and averaging 12.1% in October 2024. The Robustas’ volatility contracted to 11.2% for the month of October, a 0.1 percentage point decrease. Lastly, New York’s volatility increased by 0.5 percentage points to 12.7% while the London futures market’s volatility also increased by 1.0 percentage points to 13.6%.

Exports by Coffee Groups – Green Beans
Global green bean exports in September 2024 totalled 9.69 million bags, as compared with 7.74 million bags in the same month of the previous year, up 25.2%. For coffee year 2023/24, exports of green beans were up 11.8% to 123.75 million bags from 110.72 million bags in coffee year 2022/23, an absolute increase of 13.02 million bags. This is the biggest annual increase on record, surpassing the previous highest of 9.27 million bags in coffee year 1995/96. The rate and the volume of increase in coffee year 2023/24 are largely a reflection of the base effect of two consecutive years of downturn (of 1.1% and 5.6%), with the world green bean exports falling from 118.66 million bags in coffee year 2020/21 to 110.72 million bags in coffee year 2022/23. As such, the double-digit increase in coffee year 2023/24 represents a recovery, and not necessarily an expansion, of the long-term trend. Contextualizing, world exports of green beans have been increasing at an average of 2.36 million bags every coffee year between coffee years 2010/11 and 2020/21, while there was an increase of only 1.69 million bags annually between coffee years 2020/21 and 2023/24. The actual exports level is below the potential level of 125.73 million bags.

Shipments of the Other Milds increased by 22.9% in September 2024 to 1.92 million bags from 1.56 million bags in the same period last year. For coffee year 2023/24, exports of the Other Milds were up 4.7% to 23.05 million bags from 22.02 million bags in coffee year 2022/23.

Green bean exports of the Brazilian Naturals increased in September 2024, jumping by 37.3% to 3.68 million bags. For coffee year 2023/24, exports of the Brazilian Naturals were up 22.6% to 41.89 million bags from 34.16 million bags in coffee year 2022/23.

Exports of the Colombian Milds increased by 22.3% to 0.99 million bags in September 2024 from 0.81 million bags in September 2023. For coffee year 2023/24, exports of the Colombian Milds were up 14.3% to 12.22 million bags from 10.69 million bags in coffee year 2022/23. For coffee year 2023/24, total green beans exports of Arabicas were up 15.47% to 77.17 million bags from 66.68 million bags in coffee year 2022/23.

Overall, for the Arabicas, the double-digit growth in coffee year 2023/24 should, like the total green bean exports, be viewed as recovery back onto the long-term trend. Like the total exports, exports of the Arabicas in coffee year 2023/24 followed two consecutive years of negative growth (3.1% and 10.4%) before recording the biggest absolute annual increase on record at 10.29 million bags. Contextualizing, exports of the Arabicas have been increasing at an average of 1.45 million bags every year between coffee years 2010/11 and 2020/21. The potential level of exports is 81.38 million bags.

Green bean exports of the Robustas were up 15.4% to 3.1 million bags in September 2024 from 3.59 million bags in September 2023. For coffee year 2023/24, exports of the Robustas were up 6.2% to 46.58 million bags from 43.84 million bags in coffee year 2022/23. It is the biggest annual exports on record and was largely driven by Brazil, which exported 9.02 million bags as compared with 2.84 million bags in coffee year 2022/23. The growth in Brazil’s exports more than compensated the large drop in exports from Vietnam, which shipped 23.19 million bags in coffee year 2023/24 as compared with 26.13 million bags in coffee year 2022/23. The origin, the world’s largest producer and exporter of Robustas, has been struggling with domestic supplies, with production falling below the potential levels due to adverse weather conditions.

For coffee year 2023/24, the Arabicas’ share of total green bean exports increased to 62.4% as compared with 60.4% in coffee year 2022/23.

Exports by Regions – All Forms of Coffee
In September 2024, South America’s exports of all forms of coffee increased by 30.8% to 6.2 million bags. For coffee year 2023/24, exports of the region were up 30.7% to 66.13 million bags from 50.59 million bags in coffee year 2022/23. The region’s two largest producers and exporters, Brazil and Colombia, saw their total exports jump by 34.3% and 13.7%, respectively, to 49.03 million bags and 11.91 million bags. For Brazil, these are the largest exports on record. Part of the impetus for Brazil’s growth was the gap in the market created by Vietnam in the Robustas market. Although it is not widely acknowledged, Brazil is the secondlargest Robustas producer in the world, accounting for 32.0% of global supply in coffee year 2022/23.

Exports of all forms of coffee from Africa increased by 14.3% to 1.37 million bags in September 2024 from 1.2 million bags in September 2023. For coffee year 2023/24, exports from the region were up 17.3% to 16.02 million bags from 13.66 million bags in coffee year 2022/23. Ethiopia was the main driver of the region’s double-digits growth, with the origin’s exports up 63.5% to 5.59 million bags in coffee year 2023/24 as compared with 3.42 million bags in coffee year 2022/23. These are the largest exports on record for the origin, and it is also the first time the 5.0 million bags ceiling has been breached. The underlying reason for Ethiopia’s double-digit growth was the resolution of internal contract disputes, which had led to export shipments being delayed in coffee year 2022/23. Once again, contextualization is necessary when analysing the exports of Ethiopia: exports fell in coffee year 2022/23 by 15.0% to 3.42 million bags from 4.02 million bags in coffee year 2021/22, the lowest level since 3.09 million bags in coffee year 2015/16. As a result, the 5.59 million bags should be viewed as a recovery.

In September 2024, exports of all forms of coffee from Mexico & Central America were up 18.1% to 0.9 million bags as compared with 0.76 million bags in September 2023. For coffee year 2023/24, exports of the region were down 4.1% to 14.51 million bags from 15.13 million bags in coffee year 2022/23. The downturn was primarily driven by Honduras and Nicaragua, which suffered from decreases of 12.1% and 16.5%, respectively. The former’s exports were hampered by its off-years in the biennial production cycle, while the latter’s exports were negatively affected by the bankruptcy of Mercon Coffee Group in December 2023, a coffee trader and the owner of CISA Exportadora, a company responsible for more than half of Nicaragua’s coffee exports. Exports from Guatemala and Mexico were the two main mitigating positive factors of the region, increasing by 8.6% and 8.9% to 3.28 million bags and 2.97 million bags, respectively.

Exports of all forms of coffee from Asia & Oceania increased by 19.6% to 2.29 million bags in September 2024 as compared with 1.91 million bags in September 2023. For coffee year 2023/24, exports of the region were down 6.7% to 40.62 million bags from 43.54 million bags in coffee year 2022/23. Vietnam, the largest producer and exporter in Asia & Oceania, was the main driving force behind the region’s annual downturn, with its exports decreasing by 11.7% to 24.96 million bags. This is the lowest exports level since 22.03 million bags in coffee year 2014/15. Tightness in domestic supply due to lower production from adverse weather conditions and loss of productive areas to other cash crops, and depletion of local stocks, was the main reason for the double-digit downturn. India was a positive mitigating factor within the region, recording a 10.0% increase in its exports to 6.98 million bags in coffee year 2023/24 as compared with 6.34 million bags in coffee year 2022/23.

Exports of Coffee by Forms
Total exports of soluble coffee increased by 24.3% in September 2024 to 1.02 million bags from 0.82 million bags in September 2023. For coffee year 2023/24, soluble coffee exports were up 11.6% to 12.82 million bags from 11.48 million bags in coffee year 2022/23.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 9.3% in September 2024, the same for the same period a year ago. Brazil is the largest exporter of soluble coffee, having shipped 0.37 million bags in September 2024 and 3.89 million bags in coffee year 2023/24.

Exports of roasted beans were down 9.2% in September 2024 to 54,544 bags, as compared with 60,040 bags in September 2023. For coffee year 2023/24, roasted coffee exports were down 0.5% to 0.71 million bags from 0.713 million bags in coffee year 2022/23.

For the full report, visit icocoffee.org.

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The International Coffee Convention (ICC) was established in 2023 to address the pressing issues facing the coffee industry. The inaugural ICC identified these challenges and highlighted the opportunities within them, setting the stage for actionable solutions. While there were originally no plans to hold a second ICC so soon after the first, Dr Steffen Schwarz, founder of the ICC, said the overwhelming response and the need for continuity in tackling these challenges led to the organisation of the second ICC in 2024.

The ICC 2024 program, the theme of which is ‘Coffee in Transition’, is designed to tackle pressing issues in the coffee industry. Key sessions include:
1. Future Landscape of Multiple Coffee Species: Addressing species such as Robusta, Racemosa, and Stenophylla within the context of the Nagoya Protocol.
2. Land Use and Coffee Farming Systems: Exploring deforestation policies and innovations in coffee fermentation and processing technologies.
3. Advancements in Coffee Preparation and Business: Covering the journey from roasting to creating the perfect café crème.
4. Sustainable Utilisation of Coffee By-Products: Discussing challenges and opportunities in utilising coffee by-products sustainably.
5. Coffee and Health: Examining the nutritional impacts, benefits, and substantiating health claims of coffee.

The event will also include unique cupping sessions to explore rare coffee species:
• Rare Species Cup tasting
• Liberica Cup tasting

Additionally, there will be a live research project on sensory coffee preference testing, providing attendees with hands-on experience in evaluating coffee maturity and freshness. Among the key scientific presentations, the ICC will showcase a groundbreaking study on the impact of post-roast maturation on the sensory experience of coffee, offering new insights into how aging affects coffee flavour and quality.

The Kaldi Awards, which celebrate significant advancements and research in the coffee industry, will be presented during the convention, recognising outstanding contributions in various categories such as lifetime achievement, green coffee cultivation and processing, roasting, and preparation.

The International Coffee Convention is designed to be an unparalleled gathering for ‘anyone passionate about coffee’ — from farmers and roasters to traders and researchers. By fostering collaboration and sharing cutting-edge research, the convention aims to drive the industry towards a sustainable and innovative future.

For the full programme, visit: coffee-convention.com/Program/.

For more information and to register for the event, please visit: International Coffee Convention.

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The I-CIP averaged 216.89 US cents/lb in April, a 16.4% increase from March 2024. The I-CIP posted a median value of 221.99 US cents/lb, having fluctuated between 193.39 and 235.50 US cents/lb. The April 2024 I-CIP is above the April 2023 I-CIP by 21.5%, with the 12-month rolling average at 172.01 US cents/lb. The I-CIP grew steadily in April 2024, reaching a 13-year high. Following a similar trend, the Robustas price also hit a 45- year high, reaching its highest level since July 1979, when it averaged 195.90 US cents/lb.

In the first half of April 2024, the I-CIP surged 21.8% from 193.39 to 235.50 US cents/lb on the back of heavy rainfall in Minas Gerais, Brazil, which will affect the country’s 2024/25 supply. Vietnam also continues to face supply difficulties on the back of poor harvests in coffee years 2022/23 and 2023/24. On 26 March, Vietnam’s agriculture department projected that its national coffee production in the 2023/24 crop year could drop by –20% to 1.472 million metric tonnes, the lowest in four years, due to drought. This was reflected in the surging domestic Robusta green bean price in the country, which rose to over 132,000 VND/KG by 26 April from an average of 80,000 VND/kg on 15 February 2024 and 61,000 VND/kg in mid-November 2023. The surge was broken on 19 April on the back of three factors: (i) recovery of ICE warehouse stocks; (ii) profit taking on the paper market (the net long position on the ICE’s Europe market retreated by 5,042 lots between 16 and 23 April 2024); and (iii) the strengthening dollar (moving from 5.29 Real to 1 US$ on 16 April to 5.12 Real to 1US$ on 30 April). As a result, the I-CIP fell to 218.10 US cents/lb by 30 April.

The Colombian Milds and Other Milds increased by 15.0% and 14.8%, reaching 241.80 and 239.73 US cents/lb, respectively, in April 2024. The Brazilian Naturals presented the strongest increase amongst all coffee groups, at 17.8%, reaching an average of 218.77 US cents/lb. The Robustas grew by 16.8% to 193.65 US cents/lb in April 2024, the highest level in 45 years. ICE’s London market was also a strong driver of the growth, increasing by 18.5% to 176.04 US cents/lb, whilst the New York Futures market expanded by 18.1% to 217.97 US cents/lb, a 20-month high.

The Colombian Milds–Other Milds differential expanded from 1.41 to 2.07 US cents/lb. The Colombian Milds–Brazilian Naturals differential contracted 6.0% to 23.03 US cents/lb, whilst the Colombian Milds–Robustas differential expanded 8.4% from March to April 2024, averaging 48.14 US cents/lb. Meanwhile, the Other Milds–Brazilian Naturals differential shrank 9.2% reaching 20.96 US cents/lb. However, the Other Milds–Robustas and the Brazilian Naturals– Robustas differentials both expanded 7.1% and 26.1%, averaging 46.07 and 25.11 US cents/lb, respectively, in April 2024.

The downtrend of the Arabica and Robusta arbitrage, as measured between the London and New York Futures markets, is now over two years long, falling from 130.30 US cents/lb in April 2022 to 41.93 US cents/lb in April 2024, i.e. a 67.8% decline. However, measured against March 2024, the arbitrage expanded by 16.3% in April 2024.

Intra-day volatility of the I-CIP increased by 0.9 percentage points to 8.0% between March and April 2024. The Colombian Milds’ and Other Milds’ volatility increased to 8.5% and 8.2%, respectively. Meanwhile, the Brazilian Naturals’ volatility grew by 0.9 percentage points to 9.0% from March to April 2024. The Robustas presented an average volatility of 9.1% for the month of April. The London Futures market’s volatility also increased by 0.3 percentage points to 9.7%. Lastly, the New York futures market’s volatility moved in the same direction to that of London, reaching 9.1%, a 0.5 percentage point increase.

The London certified stocks expanded by 27.4% to 0.63 million 60-kg bags. Certified stocks of Arabica coffee reached 0.64 million 60-kg bags, a 1.7% increase since March 2024.

Exports by coffee groups – green beans

Global green bean exports in March 2024 totalled 11.87 million bags, as compared with 10.85 million bags in the same month of the previous year, up 9.4%. As a result, the cumulative total for coffee year 2023/24 to March is 62.64 million bags, as compared with 56.36 million bags over the same period a year ago, up 11.1%. The Brazilian Naturals and Robustas were the two main groups responsible for the overall strong growth observed in March 2024, together accounting for 91.5% of the 1.02-million-bag net gain in total exports. This further consolidated their already-dominant positions, increasing their combined share of the total exports to 72.5% in March 2024 as compared to 70.8% in March 2023. For the year to date, the combined share is an even higher 73.4%.

Shipments of the Other Milds decreased by 1.6% in March 2024 to 2.19 million bags from 2.22 million bags in the same period last year. As a result, the growth rate of the cumulative volume decreased to 4.2% in the first six months of coffee year 2023/24 to 9.87 million bags, as compared with the 6.0% growth rate in the first five months. In March 2024, 15 of the 29 origins in this coffee group saw their exports fall, with Costa Rica, Guatemala, Laos and Uganda suffering the largest absolute losses. On the opposite side, Ethiopia, Honduras, Papua New Guinea and Peru saw the highest absolute net gains.

Green bean exports of the Brazilian Naturals increased in March 2024, rising by 19.0% to 3.57 million bags from 3.0 million bags in March 2023. For the first six months of coffee year 2023/24, green bean exports of the Brazilian Naturals amounted to 21.36 million bags, up 17.5% from 18.19 million bags over the same period a year ago. The sharp positive growth rate stems from the 16.1% increase in exports of the Brazilian Naturals from Brazil, the biggest producer and exporter of this group of coffee, which rose to 3.07 million bags in March 2024 from 2.64 million bags in March 2023.

Exports of the Colombian Milds increased by 12.8% to 1.07 million bags in March 2024 from 0.95 million bags in March 2023. As a result, exports of the Colombian Milds for the first six months of coffee year 2023/24 are up 11.5% at 6.25 million bags, as compared with 5.6 million bags in the first six months of coffee year 2022/23. The double-digit growths, for both the current month and coffee year to date, are a consequence of the 11.9% weather-driven fall in exports in coffee year 2022/23 and subsequent normalization of supply conditions in Colombia, the largest producer and exporter of the Colombian Milds. For the current month and cumulative total to March 2024, the country’s exports of the Colombian Milds are up 12.4% and 13.1%, respectively.

Green bean exports of the Robustas were up 7.8% to 5.04 million bags in March 2024 from 4.68 million bags in March 2023. The cumulative total for the first six months of coffee year 2023/24 is up 8.9%, at 25.16 million bags, as compared with 23.1 million bags in the first six months of coffee year 2022/23. The main driver of March’s Robustas increase was Brazil, which shipped 0.85 million bags as compared with 0.11 million bags in March 2023, up 686.1%.

Exports by regions – all forms of coffee

Exports of all forms of coffee from Asia & Oceania decreased by 9.7% to 4.54 million bags in March 2024. The two main sources of the near double-digit downturn are Indonesia and Vietnam, which saw their exports fall by 33.5% and 10.2%, respectively, to 0.31 million bags and 3.22 million bags in March 2024. As a result, Indonesia’s exports to date in coffee year 2023/24 are down 21.8% at 3.04 million bags, the lowest level since coffee year 2018/19. The fundamental reason behind the fall is the shortage of local supply due to the poor harvest in coffee year 2023/24, which is estimated at 10.0 million bags as compared with 11.98 million bags in the previous coffee year. Vietnam’s latest performance is mitigated by the unusually high exports seen in March 2023, when the country shipped 3.58 million bags, the second highest March exports on record. To put this into perspective, the March 2024 exports of 3.22 million bags are above the average March volume from 2019 to 2023 (3.12 million bags).

Exports of all forms of coffee from Africa increased by 12.6% to 1.19 million bags in March 2024 from 1.06 million bags in March 2023. As a result, the cumulative total of 6.22 million bags for the first six months of coffee year 2023/24 is up 0.6% as compared with the 6.18 million bags shipped in coffee year 2022/23. Ethiopia was the driving force behind the region’s growth in March 2024, with its own exports having increased by 112.8% to 0.38 million bags from 0.18 million bags in March 2023. The size of the rebound is due to a favourable base effect and a comparative normalization of market circumstances. Contract disputes arising from a mismatch between local purchasing prices and global market prices had previously affected the volume of exports, leading March 2023’s shipment to be the lowest since 2012.

In March 2024, South America’s exports of all forms of coffee increased by 33.1% to 5.49 million bags. As a result, the cumulative total of 33.56 million bags for the first six months of coffee year 2023/24 is up 28.7% as compared with the 26.07 million bags shipped in coffee year 2022/23. The source of the strong positive growth is Brazil, which saw its exports increase by 38.8% in March 2024 to 4.31 million bags. The size of the latest growth of Brazil’s export volume remains a reaction to the 20.2% fall in the March 2023 exports (3.1 million bags). Fundamentally, South America’s and Brazil’s strong export performance reflects Brazil’s good harvests in coffee years 2022/23 and 2023/24, estimated to be up by 8.4% and 9.2%, respectively.

In March 2024, exports of all forms of coffee from Mexico & Central America were down 1.9% to 1.78 million bags, as compared with 1.82 million in March 2023. As a result, the cumulative total exports are down 3.0% from October 2023 to March 2024 at 5.74 million bags, as compared with 5.91 million bags for the same period a year ago.

Exports of coffee by forms

Total exports of soluble coffee decreased by 4.8% in March 2024 to 1.06 million bags from 1.11 million bags in March 2023. In the first six months of coffee year 2023/24, a total of 6.16 million bags of soluble coffee were exported, representing an increase of 4.0% from the 5.92 million bags exported in the same period during the previous coffee year.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 8.9% in March 2024, down from 9.5% in the same period a year ago. Brazil is the largest exporter of soluble coffee in March 2024, having shipped 0.35 million bags.

Exports of roasted beans were up 11.5% in March 2024 to 68,467 bags, as compared with 61,396 bags in March 2023. The cumulative total for coffee year 2023/24 to March 2024 was 0.37 million bags, as compared with 0.36 million bags in same period a year ago.

For the full report, visit: icocoffee.org.

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The I-CIP averaged 186.36 US cents/lb in March, a 2.4% increase from February 2024. The I-CIP posted a median value of 185.64 US cents/lb, having fluctuated between 181.39 and 193.26 US cents/lb. The March 2024 I-CIP is above the March 2023 I-CIP by 9.6%, with the 12-month rolling average at 168.82 US cents/lb. The I-CIP grew steadily in March 2024, reaching an 18-month high. Remarkably, the Robustas have reached their highest level since October 1994 when they averaged 169.43 US cents/lb.

The Colombian Milds increased by 0.4% whilst the Other Milds remained stable with a 0.0% change, thereby reaching 210.27 and 208.88 US cents/lb, respectively, in March 2024. The Brazilian Naturals presented a decline of 0.5%, reaching an average of 185.77 US cents/lb. However, the Robustas grew by 8.2% to 165.84 US cents/lb, the highest level in almost 30 years. The Intercontinental Exchange’s (ICE) London market was also a strong driver of the growth, having increased by 4.3% to 148.53 US cents/lb, whilst the New York Futures market contracted by 0.4% to 184.59 US cents/lb.

The Colombian Milds–Other Milds differential expanded from 0.75 to 1.39 US cents/lb. The Colombian Milds–Brazilian Naturals differential grew 7.5% to 24.51 US cents/lb, whilst the Colombian Milds–Robustas differential shrank 21.1% from February to March 2024, averaging 44.43 US cents/lb. Meanwhile, the Other Milds–Brazilian Naturals differential grew 4.9% reaching 23.12 US cents/lb. However, the Other Milds–Robustas and the Brazilian Naturals–Robustas differentials both contracted 22.5% and 40.5%, averaging 43.04 and 19.92 US cents/lb, respectively, in March 2024.

Arbitrage, as measured between the London and New York Futures markets, retracted by 16.0% to 36.06 US cents/lb in March 2024.

Intra-day volatility of the I-CIP increased by 0.3 percentage points to 7.1% between February and March 2024. The Colombian Milds’ and Other Milds’ volatility decreased to 7.5% and 7.7%, respectively. Meanwhile, the Brazilian Naturals’ volatility declined by 0.7 percentage points to 8.1% from February to March 2024. The Robustas presented an average volatility of 8.8% for the month of March. The London Futures market’s volatility also decreased by 0.3 percentage points to 9.4%. Lastly, the New York futures market’s volatility moved in the same direction to that of London, reaching 8.6%, a 0.3 percentage point decline.

The London certified stocks expanded by 22.1% to 0.49 million 60-kg bags. Certified stocks of Arabica coffee reached 0.63 million 60-kg bags, an 80.8% increase since February 2024.

Exports by Coffee Groups – Green Beans
Global green bean exports in February 2024 totalled 10.43 million bags, as compared with 9.52 million bags in the same month of the previous year, up 9.5%. These are the largest February exports on record, beating the previous record set in 2019 of 10.34 million bags. The magnitude of the latest increase in exports of green beans, however, is more a reflection of a favourable base effect and a comparative normalisation of supply. From December 2022 to June 2023, the exports of green beans fell consecutively, with the cumulative total decreasing by 8.2% to 66.92 million bags, the lowest level seen for those same seven months since December 2016 to June 2017.

The cumulative total for coffee year 2023/24 to February is 50.82 million bags, as compared with 45.5 million bags over the same period a year ago, up 11.7%. Brazil was the main origin driving the growth, with exports expanding by 59.9% in February 2024 to 3.38 million bags from 2.11 million bags in February 2023, while among the different groups, the Brazilian Naturals were responsible.

Shipments of the Other Milds increased by 4.2% in February 2024 to 1.91 million bags from 1.83 million bags in the same period last year. Peru, the second largest producer and exporter of the Other Milds, continues to be the main driver of the growth of this group of coffee, with the origin’s exports thereof increasing by 178.6% to 0.18 million bags from 0.06 million bags in February 2023, representing an increase of 65.5% for the year to date (2.27 million bags). Peru’s exports of the Other Milds are on track to be the third biggest on record. As a result, the cumulative volume of total exports of the Other Milds also increased by 6.6% in the first five months of coffee year 2023/24 to 7.72 million bags, versus 7.24 million bags over the same period in 2022/23.

Green bean exports of the Brazilian Naturals increased in February 2024, rising by 36.6% to 3.16 million bags from 2.59 million bags in February 2023. For the first five months of coffee year 2023/24, green bean exports of the Brazilian Naturals amounted to 17.73 million bags, up 16.7% from 15.19 million bags over the same period a year ago. The sharp positive growth rate stems from the 38.4% increase in exports of the Brazilian Naturals from Brazil, the biggest producer and exporter of this group of coffee, which rose to 2.77 million bags in February 2024 from 2.0 million bags February 2023.

Exports of the Colombian Milds increased by 14.7% to 1.12 million bags in February 2024 from 0.98 million bags in February 2023. As a result, exports of the Colombian Milds for the first five months of coffee year 2023/24 are up 13.1% at 5.27 million bags, as compared with 4.65 million bags in the first five months of coffee year 2022/23. The double-digit growths, for both the current month and coffee year to date, are a consequence of the 11.9% weather-driven fall in exports in coffee year 2022/23 and subsequent normalization of supply conditions in Colombia, the largest producer and exporter of the Colombian Milds. For the current month and cumulative total to February 2024, the country’s exports of the Colombian Milds are up 15.4% and 13.2%, respectively.

In contrast to the Arabicas, green bean exports of the Robustas were down 3.7% to 4.24 million bags in February 2024 from 4.4 million bags in February 2023. Despite this, the cumulative total for the first five months of coffee year 2023/24 is up 9.2%, at 20.11 million bags, as compared with 18.41 million bags in the first five months of coffee year 2022/23. The main driver of February’s Robustas decrease was Vietnam, which shipped 2.54 million bags as compared with 3.17 million bags in February 2023, down 19.9%. Indonesia’s Robusta exports were also down 48.1%, with a net fall of 0.13 million bags.

Exports by Regions – All Forms of Coffee
Exports of all forms of coffee from Asia & Oceania decreased by 17.0% to 3.97 million bags in February 2024. The main source of the double-digit downturn is Vietnam, which saw its exports fall by 19.7% to 2.73 million bags in February 2024 from 3.4 million bags in February 2023. The size of the fall is the result of an unfavourable base effect, with the February 2023 export volume 1.04 million bags larger than the February average of the past six years (2.36 million bags).

On balance, Vietnam’s February 2024 export volume should be deemed at a healthy level, benefitting from high and rising local prices (the local green bean price increased to an average 80,000 VND/kg on 15 February 2024, from 61,000 VND/kg in the middle of November 2023) and triggering the release of stocks as farmers took advantage. Moreover, the Tet (lunar new year, which fell on 10 February 2024) would have brought additional supply to the market as farmers sought extra income for the most important social calendar date for the country and its people.

In February 2024, South America’s exports of all forms of coffee increased by 41.7% to 4.93 million bags. The source of the strong positive growth is Brazil, which saw its exports increase by 51.0% in February 2024 to 3.64 million bags – the second highest February exports on record for the origin. The overall recovery of Brazil’s export volume remains a reaction to the 31.8% fall in the February 2023 exports 2.41 million bags, the lowest February exports since 2.23 million bags in 2013. In coffee year 2022/23, Brazil’s exports declined by 7.9% to 36.5 million bags, the lowest level since the 32.69 million bags shipped in coffee year 2017/18. To date, Brazil’s exports are up 24.6% to 12.84 million bags.

Exports of all forms of coffee from Africa increased by 14.6% to 0.98 million bags in February 2024 from 0.86 million bags in February 2023. However, the cumulative total of 4.99 million bags for the first five months of coffee year 2023/24 remains down 2.5% as compared with the 5.1 million bags shipped in coffee year 2022/23. Ethiopia was the driving force behind the region’s increased exports in February 2024, with its own exports having increased by 103.9% to 0.2 million bags from 0.1 million bags in February 2023. The size of the rebound is due to a favourable base effect and a comparative normalization of market circumstances.

Contract disputes arising from a mismatch between local purchasing prices and global market prices had previously affected the volume of exports, leading February 2023’s shipment to be the lowest since 2010.

In February 2024, exports of all forms of coffee from Mexico & Central America were down 2.7% to 1.45 million bags, as compared with 1.49 million in February 2023. As a result, the cumulative total exports are down 3.9% from October 2023 to February 2024 at 3.94 million bags, as compared with 4.1 million bags for the same period a year ago. Costa Rica, El Salvador and Guatemala were the main origins behind the region’s negative growth, with exports down 24.5%, 40.3% and 5.7%, respectively, and a combined net loss of 58,812 bags. Partly counterbalancing these origins were Honduras and Mexico, with a combined net export gain of 24,756 bags in February, up 2.0% and 6.5%, respectively.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 18.2% in February 2024 to 0.85 million bags from 1.04 million bags in February 2023. In the first five months of coffee year 2023/24, a total of 5.05 million bags of soluble coffee were exported, representing an increase of 5.0% from the 4.81 million bags exported in the same period during the previous coffee year.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 9.0% in February 2024, down from 9.5% in the same period a year ago. Brazil is the largest exporter of soluble coffee in February 2024, having shipped 0.26 million bags.

Exports of roasted beans were up 14.1% in February 2024 to 56,425 bags, as compared with 49,439 bags in February 2023. The cumulative total for coffee year 2023/24 to February 2024 was 0.32 million bags, as compared with 0.3 million bags in same period a year ago.

For the full report, visit: icocoffee.org.

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Green Coffee Price
The ICO Composite Indicator Price (I-CIP) averaged 175.73 US cents/lb in December, an 8.8% increase from November 2023. The I-CIP posted a median value of 177.64 US cents/lb, having fluctuated between 163.92 and 186.04 US cents/lb. The December 2023 I-CIP is above the December 2022 I-CIP by 11.8%, with the 12-month rolling average at 165.23 US cents/lb. The I-CIP grew steadily in December 2023, reaching a nine-month high. The rise in tensions in the Red Sea has prompted some shipping lines to re-route their coffee-carrying vessels. Thus, for South-East Asian and East African coffee en route to Europe, unintended consequences include a rise in freight costs as some shipping companies have introduced surcharges to account for the now-extended transit times.

The Colombian Milds and Other Milds increased by 7.6% and 6.9%, to 210.68 and 210.76 US cents/lb, respectively, in December 2023. The Brazilian Naturals presented a growth of 9.4%, reaching an average of 185.23 US cents/lb. However, the Robustas grew the most by 10.5% to 135.47 US cents/lb, the highest level since May 1995, when they were valued at 140.90 US cents/lb. ICE’s New York market was a strong driver of the positive growth, having increased by 9.6% to 186.67 US cents/lb, whilst the London Futures market expanded by 12.2%, to 123.91 US cents/lb, also the highest level since May 1995.

Arbitrage, as measured between the London and New York Futures markets, widened by 5.0% to 62.77 US cents/lb in December 2023.

Intra-day volatility of the I-CIP expanded to 10.2% between November and December 2023. The Colombian Milds’ and Other Milds’ volatility also increased to 10.8% and 10.9%, respectively. Meanwhile, the Brazilian Naturals’ volatility rose by 2.9 percentage points to 12.6% from November to December 2023. The Robustas presented the smallest volatility increase, with a 0.9 percentage point gain, averaging 9.2% for the month of December. The London Futures market’s volatility increased by 2.7 percentage points to 9.1%. Lastly, the New York futures market’s volatility moved in tandem to that of London, expanding by 2.4 percentage points and reaching 10.5%.

The New York certified stocks continued on their downward trajectory, retracting by 15.0% to 0.28 million 60-kg bags, one of the lowest figures ever recorded. Certified stocks of Robusta coffee reached 0.57 million 60-kg bags, a 68.4% increase since November 2023.

Exports by Coffee Groups — Green Beans
Global green bean exports in November 2023 totalled 9.79 million bags, as compared with 9.1 million bags in the same month of the previous year, up 7.6%. As a result, the cumulative total for coffee year 2023/24 to November is 18.39 million bags, as compared with 17.7 million bags over the same period a year ago, up 3.9%.

Shipments of the Other Milds increased by 17.9% in November 2023 to 1.31 million bags from 1.11 million bags in the same period last year. Peru was the main driver of the double-digit growth of this group of coffee, with the origin’s exports of the Other Milds increasing by 60.1% to 0.57 million bags in November 2023 from 0.35 million bags in November 2022, following a 28.9% increase in October 2023. The resurgence of Peru’s exports of the Other Milds is due to the return to normality of local production conditions in coffee year 2023/24 as compared with those seen in coffee year 2022/23. Irregular weather patterns negatively affected the local supply of coffee beans in 2022/23, especially in the first three months of the coffee year, when 1.15 million bags were exported. This was the lowest first three months of exports since the 0.93 million bags shipped in coffee year 2014/15, representing a 26.7% fall in the average volume of exports in coffee years 2015/16–2021/22, which was 1.57 million bags. As a result, the cumulative volume of total exports of the Other Milds also increased, jumping by 9.2% in the first two months of coffee year 2023/24 to 2.74 million bags, versus 2.51 million bags over the same period in 2022/23.

Green bean exports of the Brazilian Naturals increased in November 2023, rising by 1.6% to 3.63 million bags. For the first two months of coffee year 2023/24, green bean exports of the Brazilian Naturals amounted to 7.35 million bags, up 4.0% from 7.07 million bags over the same period a year ago. The relatively shallow positive growth rate reflects the 2.6% increase in exports of the Brazilian Naturals from Brazil, the biggest producer and exporter of this group of coffee, which rose to 3.2 million bags in November 2023 from 3.12 million bags November 2022.

Exports of the Colombian Milds increased by 34.0% to 1.15 million bags in November 2023 from 0.85 million bags in November 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were up 35.6% in November 2023. As a result, exports of the Colombian Milds for the first two months of coffee year 2023/24 are up 18.7% at 2.1 million bags, as compared with 1.77 million bags in the first two months of coffee year 2022/23.

Green bean exports of the Robustas amounted to 3.7 million bags in November 2023, as compared with 3.56 million bags in November 2022, up 4.0%. In volume terms, these constitute the biggest November exports on record, surpassing the level set in November 2022. However, the rise was not sufficient to offset the 10.9% decrease observed in October 2023, when the 2.49 million bags exported represented the lowest quantity for the month since the 1.91 million bags in October 2011. As a result, the cumulative total for the first two months of coffee year 2023/24 is down 2.5%, at 6.2 million bags, as compared with 6.36 million bags in the first two months of coffee year 2022/23. The main driver of November’s Robustas increase was Brazil, shipping 0.86 million bags, a jump of 850.2%.

Exports by Regions — All Forms of Coffee
In November 2023, South America’s exports of all forms of coffee increased by 24.7% to 6.07 million bags. The source of the strong positive growth is mainly Brazil, which saw its exports increase by 21.1% to 4.34 million bags from 3.58 million bags in November 2022. More specifically, it was the Robustas from the origin, which in November increased by 850.2% to 0.86 million bags from 0.09 million bags, which drove the region’s positive growth. The November 2023 exports are Brazil’s highest on record for Robusta coffee, beating the 698,856 bags exported in August 2023. Brazil is one of the largest producers and exporters of the Robustas, having accounted for an 8.1% share of the group’s total exports in coffee year 2021/22, i.e. 3.94 million bags. That said, in July–October 2023, Brazil’s share of the Robustas more than doubled, increasing to 22.3%, with the country exporting 3.09 million bags in just four months. This surge was in response to the reduced volume of Robustas coming out of Vietnam, whose Robusta exports fell by 27.5% in July–October 2023 to 4.92 million bags from 6.78 million bags over the same period a year ago. The continued rampant expansion of Brazil’s Robusta exports despite Vietnam’s recovery in November 2023 suggests that its strong foray into this market may continue.

Robusta exports fell by 27.5% in July–October 2023 to 4.92 million bags from 6.78 million bags over the same period a year ago. The continued rampant expansion of Brazil’s Robusta exports despite Vietnam’s recovery in November 2023 suggests that its strong foray into this market may continue.

Exports of all forms of coffee from Africa decreased by 13.5% to 1.01 million bags in November 2023 from 1.16 million bags in November 2022. For the first two months of coffee year 2023/24, exports totalled 2.06 million bags as compared with 2.24 million bags in coffee year 2022/23, down 8.1%. This is the third consecutive month of negative growth for the region and it affected most origins, including all the major producers whose combined exports decreased by 11.4% to 0.93 million bags from 1.05 million bags in November 2022. It is speculated that the surge in Brazil’s Robusta exports is crowding out traditional exporters of the group from the market, thus broadly affecting Africa as a whole, which is a largely Robusta-producing region. Uganda, the largest producer and exporter of Robusta coffee in Africa, was also affected by a delayed harvest season which negatively impacted the supply availability.

In November 2023, exports of all forms of coffee from Mexico & Central America were up 15.7% to 0.41 million bags, as compared with 0.35 million in November 2022. As a result, total exports are up 11.0% for October 2023 to November 2023 at 0.9 million bags, as compared with 0.81 million bags for the same period a year ago. Guatemala, Honduras and Mexico are the three main origins behind the region’s double-digit growth in November, with their respective exports up 114.0%, 29.7% and 11.8%. These robust growth rates do not, however, herald the beginning of a record-breaking year for the three origins or for the region, but rather are indications that export volumes are returning to the levels of the recent past, following a sharp fall in coffee year 2022/23. Accordingly, the average October–November export volume for coffee years 2017/18–2021/22 was 0.7 million bags for the three countries as compared with 0.6 million bags in coffee year 2022/23, a 14.6% fall. This has now increased to 0.68 million bags in coffee year 2023/24.

Exports of all forms of coffee from Asia & Oceania decreased by 18.0% to 3.12 million bags in November 2023. November’s downturn was mainly due to Indonesia, with exports down 45.2% to 0.49 million bags from 0.89 million bags in November 2022. These are the lowest November exports since the 0.2 million bags shipped in 2018. The decrease can be attributed to a reduced harvest in coffee year 2023/24, which is estimated to have fallen by 16.6% to 10.0 million bags from 11.98 million bags in coffee year 2022/23 on the back of excessive rains that damaged cherries in April–May 2023. Vietnam’s exports fell by 7.7% in November, a vast improvement from the steep declines of 23.6%, 45.0% and 44.7% seen in August, September and October 2023. This may indicate that its supply issues have now started to resolve after very low in-origin stock levels were reported in Q4 of coffee year 2022/23, when the start of the harvest still remained three to four months away.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 25.4% in November 2023 to 0.77 million bags from 1.03 million bags in November 2022. In the first two months of coffee year 2023/24, a total of 1.75 million bags of soluble coffee were exported, representing a decrease of 3.0% from the 1.8 million bags exported in the same period during the previous coffee year.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 8.6% in November 2023, down from 9.2% in the same period a year ago. Brazil is the largest exporter of soluble coffee, having shipped 0.24 million bags in November 2023.

Exports of roasted beans were down 15.5% in November 2023 to 54,379 bags, as compared with 64,324 bags in November 2022. The cumulative total for coffee year 2023/24 to November 2023 was 0.1 million bags, as compared with 0.13 million bags in same period a year ago.

Production and Consumption
World coffee production increased by 0.1% to 168.2 million bags in coffee year 2022/23. The stagnant growth rate belies the tremendous changes at the regional level, with the coffee world neatly split between the expanding Americas and the shrinking rest of the world.

Asia & Oceania and Africa’s 4.7% and 7.2% decreases in production to 49.84 million bags and 17.9 million bags, respectively, can be attributed to adverse weather conditions negatively affecting key producers in the regions, particularly Vietnam, Côte d’Ivoire and Uganda. The magnitude of the fall in outputs of the two regions was entirely mitigated by the Americas, especially by South America’s 4.8% increase, which in turn was driven mainly by the biennial production-affected 8.4% increase in Brazil. The combined output of the Americas was 100.5 million bags.

The Americas versus the rest of the world split was also reflected in the production split between the Arabicas and Robustas, with the former’s output increasing by 1.8% to 94.0 million bags as compared with the 2.0% decrease of the latter to 74.2 million bags.

Looking ahead, the output for coffee year 2023/24 is expected to increase by 5.8% to 178.0 million bags, with the Arabicas’ output rising to 102.2 million bags and the Robustas’ increasing to 75.8 million bags.

The biennial production effect will play a large role in the outlook, especially for Brazil and the Arabicas, as the impact of the July 2021 frost continues to be resolved. Coffee year 2023/24 is anticipated to be an exceptional off-biennial year, feeling more like a good on-biennial following an average on-biennial year. Adverse weather conditions, first noted in 2022 and continuing into 2023, will have a negative impact on the outlook for coffee year 2023/24. The anticipated El Niño phenomenon is set to dampen the outlook in Asia, especially for origins like Indonesia. Meanwhile, Vietnam is expected to benefit from the drier/hotter weather as irrigation mitigates the reduced precipitation.

World coffee consumption is continuing to resolve through the issues brought about by the COVID-19 pandemic, with the consumption trend following an established patten in response to an external shock. The expectation for coffee year 2022/23 was for a smaller positive growth rate; however, world coffee consumption actually recorded a decrease of 2.0% to 173.1 million bags.

Consumption in coffee year 2022/23 did not faithfully follow the established pattern due to the impact of the high cost of living, falling disposable incomes and a long stocks drawdown. Despite coffee being relatively inelastic, the challenging global economic environment would have had a negative impact on its consumption. The world inflation rate was at its highest in 2021 at 9.4%, while the benchmark interest rate averaged 4.9% at the end of September 2023 in the European Union, UK and USA, the highest level since an average of 5.8% in 2000. At the same time, there was a large drawdown of stocks, where combined stocks reported by the European Coffee Federation and those held at the Intercontinental Exchange’s warehouses in the USA fell by 4.8 million bags from 14.5 million to 9.8 million. This drawdown would have reduced the need for purchases on the international market, seemingly reflected as lower and anomalous global consumption rates for coffee year 2022/23.

The world coffee consumption outlook for coffee year 2023/24 is broadly framed by the assumption that the global economy will continue to grow at above 3.0%, and that the industry will respond to the large drawdown of stocks, which will be positively reflected in apparent consumption. As a result, world coffee consumption is expected to grow by 2.2% to 177.0 million bags, with non-producing countries making the biggest contribution to the overall increase. Coffee consumption in this group of countries should expand by 2.1%.

As a result, the world coffee market is expected to run a surplus of 1.0 million bags in coffee year 2023/24.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). For the full CRO or for more information, visit the ICO website: icocoffee.org.

The post Robustas hit a 25-year high, averaging 135.47 US cents/lb in December 2023 appeared first on Tea & Coffee Trade Journal.

The ICO Composite Indicator Price (I-CIP) averaged 161.53 US cents/lb in November, a 6.3% increase from October 2023. The I-CIP posted a median value of 161.63 US cents/lb, having fluctuated between 153.32 and 169.99 US cents/lb. The November 2023 I-CIP is above the November 2022 I-CIP by 3.1%, with the 12-month rolling average at 163.69 US cents/lb, having ranged in between 151.94 in October 2023 and 178.57 US cents/lb in April 2022. The I-CIP has remained stable around the 160 US cents/lb mark, with daily price variation declining on average for the October 2022 to November 2023 range, only 0.04%.

The Colombian Milds and Other Milds increased by 5.3% and 7.2%, to 195.85 and 197.18 US cents/lb, respectively, in November 2023. The Brazilian Naturals presented the strongest growth of 8.8%, reaching an average of 169.25 US cents/lb. However, the Robustas also grew by 3.2% to 122.63 US cents/lb. The International Coffee Exchanges’s (ICE) New York market was a strong driver of the positive growth, growing by 9.2% to 170.25 US cents/lb whilst the London Futures market expanded by 4.8%, to 110.45 US cents/lb.

The Colombian Milds–Other Milds differential contracted from 2.02 to 1.33 US cents/lb. The Colombian Milds–Brazilian Naturals differential shrank 12.6% % to 26.60 US cents/lb, whilst the Colombian Milds–Robustas differential also expanded 9.1% from October to November 2023, averaging 73.22 US cents/lb. Meanwhile, the Other Milds–Brazilian Naturals differential contracted 1.8%, reaching 27.93 US cents/lb. However, the Other Milds–Robustas and the Brazilian Naturals–Robustas differentials expanded 14.5% and 27.1%, averaging 74.55 and 46.62 US cents/lb, respectively, in November 2023.

Arbitrage, as measured between the London and New York Futures markets, widened by 18.4% to 59.81 US cents/lb in November 2023. Intra-day volatility of the I-CIP was raised to 8.0% between October and November 2023. The Colombian Milds’ and Other Milds’ volatility also increased to 8.7% and 8.8%. Meanwhile, the Brazilian Naturals’ volatility rose by 1.1 percentage points to 9.7% from October to November 2023. The Robustas presented the smallest volatility increase, with a 0.8 percentage point gain, averaging 8.3% for the month of November. The London Futures market’s volatility decreased by 2.4 percentage points to 9.1%. Lastly, the New York futures market’s volatility moved in tandem to that of London, expanding by 2.4 percentage points and reaching 10.5%.

The New York and London certified stocks continued on their downward trajectory, where London retracted by 49.2% to 0.34 million 60-kg bags, the lowest figure recorded since March 2014. Certified stocks of Arabica coffee reached 0.32 million 60-kg bags, a 24.5% decrease.

Exports by Coffee Groups – Green Beans
Global exports of green beans in October 2023 totalled 8.57 million bags, compared with 8.61 million bags in the same month of the previous year, down 0.4%. The downturn was driven by the Robustas, the only one of the four groups to start coffee year 2023/24 with negative growth.

The Brazilian Naturals made a strong start to the new coffee year, with exports increasing by 10.0% to 4.02 million bags from 3.66 million bags in October 2022. This is the second-highest volume exported in the month of October on record, just behind the 3.9 million bags shipped in 2020. Brazil was the main driver of this strong start, with the origin’s total green bean exports up 23.0% to 4.08 million bags in October 2023, which is also the country’s second-highest volume of exports in the month of October to be documented.

Exports of the Colombian Milds increased by 0.2% to 1.031 million bags in October 2023 from 1.03 million bags in October 2022. The near-stagnant start to the new coffee year was due to the conflation of the continued downturn in Colombia, the largest producer and export of the Colombian Milds, and the strong start made by Kenya and Tanzania, the two other origins that make up this coffee group.

Shipments of the Other Milds decreased by 1.8% in October 2023 to 1.59 million bags from 1.62 million bags in the same period last year. The main negative contributions came from Brazil (down 66.2% and 78,719 bags) and Papua New Guinea (down 34.3% and 53,737 bags), while Honduras provided the largest positive contribution (up 28.9% and 138,993 bags).

Of the four coffee groups, the Robustas have recorded the highest contraction in the new coffee year to date, with exports falling by 8.0% to 2.88 million bags from 3.14 million bags. Vietnam, the largest Robusta producer in the world, was the driver of the sharp downturn, with exports of Robusta green beans down 45.2% to 0.69 million bags in October 2023 from 1.26 million bags in October 2022.

Exports by Regions – All Forms of Coffee
In October 2023, South America’s exports of all forms of coffee increased by 16.4% to 5.95 million bags. Brazil was the main driving force of the double-digit growth of the region, having shipped 4.37 million bags in October 2023, a jump of 21.7%. Peru provided added support, with its exports increasing by 28.9% to 0.62 million bags from 0.48 million bags in October 2022.

Exports of all forms of coffee from Asia & Oceania totalled 2.05 million bags in October 2023, decreasing by 26.7%. Vietnam, the world’s second-largest producer and exporter of coffee, was the main driver of the region’s sharp downturn, with total exports down 44.7% to 0.75 million bags in October 2023 from 1.36 million bags in October 2022. This was the lowest volume of exports since the 0.7 million bags shipped in October 2008. A shortage of exportable materials within Vietnam, due to the lower-than-expected harvest in coffee year 2022/23, a delay in supply from the current coffee year’s harvest and a very strong export performance in the first nine months of the previous coffee year, explain the sharp downturn.

Exports of all forms of coffee from Africa decreased by 1.0% to 1.07 million bags in October 2023 from 1.08 million bags in October 2022. Ethiopia (–13.5%), Rwanda (–34.8%) and Cameroon (–57.4%) were the three main origins making a negative contribution to the region’s exports, in absolute terms, while Burundi (200.0%), Côte d’Ivoire (40.9%), Kenya (31.4%) and Uganda (2.8%) were the main origins making positive contributions. According to the Uganda Coffee Development Authority, the promising export performance in October 2023 was due to adequate supply from a good crop harvest in the South-Western region and the prevailing good prices on the global scene which prompted exporters to release their stocks. In Ethiopia, contract disputes arising out of a mismatch between local purchasing prices and the global market prices, first reported in the middle of coffee year 2022/23, continue to negatively impact export volume in the new coffee year.

In October 2023, exports of all forms of coffee from Mexico & Central America were up 0.4% to 0.459 million bags as compared with 0.457 million in October 2022. The performances of individual origins belied the less-than-dynamic growth of the region, with very strong negative and positive growth rates registered in October: Costa Rica (212.7%), El Salvador (69.6%), Guatemala (18.0%) and Nicaragua (15.6%) on the expansion side against the decreasing Dominican Republic (–80.1%), Honduras (–39.2%) and Mexico (–11.1%).

Exports of Coffee by Forms
Total exports of soluble coffee increased by 16.9% in October 2023 to 0.91 million bags from 0.78 million bags in October 2022. Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 10.6% in October 2023, up from 9.0% for the same period a year ago. Brazil is the largest exporter of soluble coffee, having shipped 0.28 million bags in October 2023. Exports of roasted beans were down 20.4% in October 2023 to 49,185 bags, as compared with 61,781 bags in October 2022.

Production and Consumption
World coffee production increased by 0.1% to 168.2 million bags in coffee year 2022/23. The stagnant growth rate belies the tremendous changes at the regional level, with the coffee world neatly split between the expanding Americas and the shrinking rest of the world.

Asia & Oceania and Africa’s 4.7% and 7.2% decreases in production to 49.84 million bags and 17.9 million bags, respectively, can be attributed to adverse weather conditions negatively affecting key producers in the regions, particularly Vietnam, Côte d’Ivoire and Uganda. The magnitude of the fall in outputs of the two regions was entirely mitigated by the Americas, especially by South America’s 4.8% increase, which in turn was driven mainly by the biennial production-affected 8.4% increase in Brazil.

The combined output of the Americas was 100.5 million bags. The Americas versus the rest of the world split was also reflected in the production split between the Arabicas and Robustas, with the former’s output increasing by 1.8% to 94.0 million bags as compared with the 2.0% decrease of the latter to 74.2 million bags.

Looking ahead, the output for coffee year 2023/24 is expected to increase by 5.8% to 178.0 million bags, with the Arabicas’ output rising to 102.2 million bags and the Robustas’ increasing to 75.8 million bags.

The biennial production effect will play a large role in the outlook, especially for Brazil and the Arabicas, as the impact of the July 2021 frost continues to be resolved. Coffee year 2023/24 is anticipated to be an exceptional off-biennial year, feeling more like a good on-biennial following an average on-biennial year. Adverse weather conditions, first noted in 2022 and continuing into 2023, will have a negative impact on the outlook for coffee year 2023/24. The anticipated El Niño phenomenon is set to dampen the outlook in Asia, especially for origins like Indonesia. Meanwhile, Vietnam is expected to benefit from the drier/hotter weather as irrigation mitigates the reduced precipitation.

World coffee consumption is continuing to resolve through the issues brought about by the Covid-19 pandemic, with the consumption trend following an established patten in response to an external shock. The expectation for coffee year 2022/23 was for a smaller positive growth rate; however, world coffee consumption actually recorded a decrease of 2.0% to 173.1 million bags.

Consumption in coffee year 2022/23 did not faithfully follow the established pattern due to the impact of the high cost of living, falling disposable incomes and a long stocks drawdown. Despite coffee being relatively inelastic, the challenging global economic environment would have had a negative impact on its consumption. The world inflation rate was at its highest in 2021 at 9.4%, while the benchmark interest rate averaged 4.9% at the end of September 2023 in the European Union, UK and USA, the highest level since an average of 5.8% in 2000. At the same time, there was a large drawdown of stocks, where combined stocks reported by the European Coffee Federation and those held at the Intercontinental Exchange’s warehouses in the USA fell by 4.8 million bags from 14.5 million to 9.8 million. This drawdown would have reduced the need for purchases on the international market, seemingly reflected as lower and anomalous global consumption rates for coffee year 2022/23.

The world coffee consumption outlook for coffee year 2023/24 is broadly framed by the assumption that the global economy will continue to grow at above 3.0%, and that the industry will respond to the large drawdown of stocks, which will be positively reflected in apparent consumption. As a result, world coffee consumption is expected to grow by 2.2% to 177.0 million bags, with non-producing countries making the biggest contribution to the overall increase. Coffee consumption in this group of countries should expand by 2.1%.

Balance. As a result, the world coffee market is expected to run a surplus of 1.0 million bags in coffee year 2023/24.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). To download the full report or for more information, visit: icocoffee.org.

The post <strong>Coffee prices remain stable averaging above 160 US cents/lb in November 2023</strong> appeared first on Tea & Coffee Trade Journal.

Green Coffee Price
The ICO Composite Indicator Price (I-CIP) averaged 151.94 US cents/lb in October, a 0.8% decline from September 2023. The I-CIP posted a median value of 151.58 US cents/lb, having fluctuated between 145.99 and 160.09 US cents/lb.

The Colombian Milds and Other Milds increased by 0.5% and 0.2%, to 185.97 and 183.95 US cents/lb, respectively, in October 2023. The Brazilian Naturals presented the strongest growth of 0.9%, reaching an average of 155.52 US cents/lb. However, Robustas retracted 4.1% to 118.83 US cents/lb. ICE’s New York market grew by 1.5% whilst the London Futures market shrank by 3.4%, to 155.91 and 105.40 US cents/lb, respectively.

The Colombian Milds-Other Milds differential grew 38.5% to 2.02 US cents/lb. The Colombian Milds-Brazilian Naturals differential shrank 1.1% to 30.45 US cents/lb, whilst the Colombian Milds-Robustas differential also expanded 9.9% from September to October 2023, averaging 67.14 US cents/lb. Meanwhile, the Other Milds-Brazilian Naturals differential contracted 3.1%, reaching 28.43 US cents/lb. However, the Other Milds-Robustas and the Brazilian Naturals-Robustas differentials expanded 9.2% and 21.1%, averaging 65.12 and 36.69 US cents/lb, respectively, in October 2023.

Arbitrage, as measured between the London and New York Futures markets, widened by 13.7% to 50.51 US cents/lb in October 2023.

Intra-day volatility of the I-CIP remained stable at 6.3% between September and October 2023. The Colombian Milds’ and Other Milds’ volatility also increased to 6.8% and 7.6%. Meanwhile, the Brazilian Naturals’ volatility rose by 0.5 percentage points to 8.6% from September to October 2023. The Robustas presented the smallest volatility increase, with a 0.1 percentage point gain, averaging 7.5% for the month of October. The London Futures market’s volatility decreased by 0.6 percentage points to 6.7%. Lastly, the New York futures market’s volatility moved in the opposite direction to that of London, expanding by 0.4 percentage points and reaching 8.1%.

The New York and London certified stocks moved in the same downward direction, where London retracted by 7.9% to 0.67 million 60-kg bags, whilst certified stocks of Arabica coffee reached 0.44 million 60-kg bags, a 10.7% decrease and the lowest figure since October 2022.

Exports by Coffee Groups – Green Beans
Global green bean exports in September 2023 totalled 7.8 million bags, as compared with 8.83 million bags in the same month of the previous year, down 11.6%. For coffee year 2022/23, exports of green beans were down 5.5% to 110.81 million bags from 117.28 million bags in coffee year 2021/22. The global macro-economic environment was not conducive to consumer confidence in coffee year 2022/23, with global inflation and interest rates in many of the key advanced economies high and rising, increasing the cost of living and thus reducing disposable income levels for a very large section of the world.

These conditions seemingly support a downturn in the consumption of coffee and consequently in global exports of green beans. Nevertheless, the global economy was not only projected to expand in calendar year 2023, but the outlook was also raised between April–October 2023 by the International Monetary Fund (IMF), which suggests otherwise. The drop in global exports of green beans in coffee year 2022/23 may therefore lie more with logistics/the supply chain than the economy and actual consumption of coffee. Average green bean exports amounted to 118.13 million bags in coffee years 2018/19–2021/22, as compared with an average 109.59 million bags for coffee years 2014/15–2017/18, a jump of 8.54 million bags. This suggests a build-up of stocks in non-producing countries which have been heavily drawn down in the past 12 months.

Shipments of the Other Milds decreased by 13.1% in September 2023 to 1.57 million bags from 1.8 million bags in the same period last year. For coffee year 2022/23, exports of the Other Milds were down 12.1% to 22.11 million bags from 25.16 million bags in coffee year 2021/22. Green bean exports of the Brazilian Naturals decreased in September 2023, falling by 13.4% to 2.69 million bags. For coffee year 2022/23, exports of the Brazilian Naturals were down 8.5% to 34.17 million bags from 37.33 million bags in coffee year 2021/22. Exports of the Colombian Milds increased by 6.7% to 0.87 million bags in September 2023 from 0.82 million bags in September 2022. For coffee year 2022/23, exports of the Colombian Milds were down 11.2% to 10.77 million bags from 12.14 million bags in coffee year 2021/22. For coffee year 2022/23, total green bean exports of the Arabicas were down 10.1% to 67.05 million bags from 74.63 million bags in coffee year 2021/22.

Overall, for the Arabicas, exports were seemingly negatively affected by the drawdown of stocks in consuming countries, with buyers staying away from the markets in coffee year 2022/23. Furthermore, substitution towards the more competitively priced Robustas, induced by the increased cost of living and reduced disposable income, would have also added to the downturn (see Green Coffee Price).

Exports of the Colombian Milds fell below the 11.0 million bags mark for the first time since coffee year 2012/13. These exports were primarily driven by Colombia, the main origin of this group of coffee, and weather-related disruption affected supply throughout most of coffee year 2022/23. Indeed, Colombia’s green bean exports contracted for the first 11 months of coffee year 2022/23, with only September 2023 showing an expansion. Figures for the year show that, overall, the country’s exports declined 13.1% to 9.42 million bags, the first time they have dropped below 10.0 million bags since coffee year 2013/14.

Green bean exports of the Robustas amounted to 2.67 million bags in September 2023, as compared with 3.09 million bags in September 2022, down 13.8%. For coffee year 2022/23, exports of the Robustas were up 2.6% to 43.76 million bags from 42.66 million bags in coffee year 2021/22. Of the four groups of coffee, the Robustas were the only group to experience positive growth in coffee year 2022/23, benefitting from macro-economic-induced substitution away from less competitively priced Arabicas.

The September 2023 exports represent the lowest September volume for the Robustas since the 2.58 million bags shipped in 2012 and were a result of the 43.4% decrease in exports from Vietnam, the world’s largest producer and exporter of the group, which only shipped 0.81 million bags – the lowest September exports since 2008 (0.79 million bags). Vietnam has been struggling with supply since the start of Q4 of coffee year 2022/23, when very low in-origin stock levels were reported at a time when the start of the harvest still remained three to four months away. The low September 2023 export levels appear to be a continuation of the industry’s deepening struggle with supply issues.

Exports by Regions – All Forms of Coffee
In September 2023, South America’s exports of all forms of coffee decreased by 3.4% to 4.74 million bags. For coffee year 2022/23, the region’s exports were down 11.0% to 50.59 million bags from 56.83 million bags in coffee year 2021/22. The region’s two largest producers and exporters, Brazil and Colombia, saw their total exports fall by 7.9% and 12.8%, respectively. South America’s fortunes are closely tied to the fortunes of the Arabicas and many of the same factors that explain the latter’s double-digit fall also explain the former’s. After all, from coffee year 2018/19 to 2022/23, 93.2% of the total green bean exports from South America were Arabicas, on average. The drawdown of stocks in consuming countries and substitution towards the Robustas are the two main factors. Two specific and additional factors are that (i) Brazil’s export performance was poor due to its relatively limited supply following two consecutive years of below-par harvests; and (ii) Colombia struggled with weather-impacted supply conditions that negatively affected the origin’s export volume.

Exports of all forms of coffee from Africa decreased by 1.9% to 1.21 million bags in September 2023 from 1.23 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 1.4% to 13.53 million bags from 13.73 million bags in coffee year 2021/22. The relatively strong global demand for Robustas was the fundamental source of Africa’s positive export growth rate in coffee year 2022/23. Moreover, particularly during Q4 of coffee year 2022/23, the reduced volume of exports from the Asia and Oceania region, and more pointedly from Vietnam, strengthened Africa’s own export performance. Uganda, the largest producer and exporter of Robusta coffee in Africa, took the opportunity to fill the gap in the market left by Vietnam and the Asia and Oceania region as a whole.

In September 2023, exports of all forms of coffee from Mexico and Central America were down 9.2% to 0.74 million bags as compared with 0.81 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 3.1% to 15.3 million bags from 15.78 million bags in coffee year 2021/22. The downturn was primarily driven by Guatemala and Mexico, which suffered 11.5% and 16.5% decreases, respectively. However, the mitigating factor that limited the region’s fall in exports to a low single-digit decrease was Honduras’ 13.5% increase.

Exports of all forms of coffee from Asia and Oceania decreased by 35.7% to 1.91 million bags in September 2023 as compared with 2.98 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 0.9% to 43.56 million bags from 43.95 million bags in coffee year 2021/22. Asia and Oceania’s fortunes are closely tied to the fortunes of the Robustas and many of the same factors that explain the latter’s single-digit increase also explain the former’s. From coffee year 2018/19 to 2022/23, 89.1% of the total green bean exports from Asia & Oceania were Robustas, on average. In coffee year 2022/23, Vietnam’s exports were up 0.4% to 28.29 million bags from 28.19 million bags in coffee year 2021/22.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 27.3% in September 2023 to 0.75 million bags from 1.03 million bags in September 2022. For coffee year 2022/23, soluble coffee exports were down 5.7% to 11.47 million bags from 12.16 million bags in coffee year 2021/22.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 8.7% in September 2023, down from 10.4% for the same period a year ago. For coffee year 2022/23, soluble coffee’s share of the total exports was 9.3%, the same as in coffee year 2021/22. Brazil is the largest exporter of soluble coffee, having shipped 0.27 million bags in September 2023 and 3.77 million bags in coffee year 2022/23.

Exports of roasted beans were down 26.7% in September 2023 to 55,203 bags, as compared with 75,355 bags in September 2022. For coffee year 2022/23, roasted coffee exports were down 16.0% to 0.71 million bags from 0.84 million bags in coffee year 2021/22.

Production and Consumption
Under the current circumstances, the estimates and outlook of production and consumption for coffee years 2021/22 and 2022/23 remain the same.

World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in a number of key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23. Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23.

The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year. Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built up during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22. Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). To download the full CRO or for more information, visit the ICO website: icocoffee.org.

The post Global green coffee exports drop 5.5% for CY 2022/23 appeared first on Tea & Coffee Trade Journal.

Green Coffee Price
The ICO Composite Indicator Price (I-CIP) averaged 153.13 US cents/lb in September, posting a median value of 152.74 US cents/lb and fluctuating between 147.86 and 160.17 US cents/lb.

The Robustas remained at a near-record high in September, staying firmly above the 120.00 US cents/lb mark. The Colombian Milds and Other Milds decreased by 1.4% and 1.7%, to 184.98 and 183.52 US cents/lb, respectively, in September 2023. The Brazilian Naturals and Robustas both contracted by 0.3% and 0.6%, reaching an average of 154.19 and 123.89 US cents/lb, respectively. ICE’s New York market fell by 1.9%, whilst the London Futures market shrank by 2.0%, to 153.55 and 109.14 US cents/lb, respectively.

The Colombian Milds-Other Milds differential grew 79.1% to 1.46 US cents/lb. The Colombian Milds-Brazilian Naturals differential shrank 6.4% to 30.79 US cents/lb, whilst the Colombian Milds-Robustas differential also contracted 2.9% from August to September 2023, averaging 61.09 US cents/lb. Meanwhile, the Other Milds-Brazilian Naturals and the Other Milds-Robustas both contracted 8.6 and 4.0%, reaching 29.33 and 59.63 US cents/lb, respectively. However, the Brazilian Naturals-Robustas differentials expanded 0.9%, averaging 30.30 US cents/lb in September 2023.

In September 2023, the Colombian Milds-Other Milds Arabica differential fluctuated between positive and negative.

Arbitrage, as measured between the London and New York Futures markets, narrowed by 1.8% to 44.41 US cents/lb in September 2023. This marks the lowest point since October 2019, when arbitrage sat at 44.07 US cents/lb.

Intra-day volatility of the I-CIP followed a consistent downtrend, reaching 6.3%, a 0.7 percentage point decrease between August and September 2023. The Robustas presented the strongest volatility decrease, with a 1.3 percentage point drop, averaging 7.4% for the month of September. The Colombian Milds’ and Other Milds’ volatility also contracted to 6.5% and 6.8%. Meanwhile, the Brazilian Naturals’ volatility dropped by 0.7 percentage points to 8.1% from August to September 2023, whilst the London futures market’s volatility also decreased by 2.1 to 7.3%. Lastly, the New York futures market’s volatility moved in the same direction as London, retracting by 0.9 percentage points and reaching 7.7% for New York.

The New York and London certified stocks moved in opposite directions, where London grew 25.7% to 0.73 million 60-kg bags, whilst certified stocks of Arabica coffee reached 0.49 million 60-kg bags, a 13.8% decrease.

The absence of market participants, as evidenced by the falling exports (see Exports by Coffee Groups – Green Beans), continued to prevail over the I-CIP, explaining the overarching trajectory of the I-CIP in September. However, currency movements, market sentiments, dwindling supplies, weather and the fundamentals all played their part in the coffee price movements in September, which saw the I-CIP rally, before falling once again due to foreign exchange movements.

From 22 August to 19 September 2023, the I-CIP recovered, increasing from a low of 148.79 to 160.17 US Cents/lb, ie, an increase of 7.6%. This came on the back of reports of heavy rain in Brazil and a continued fall in the certified stocks held at the New York ICE warehouses. Somar Meteorologia, a Brazilian meteorology company, reported on 5 September that Brazil’s Minas Gerais region, the country’s largest coffee producing region, received 22.8 mm of rain in the past week, or 308% of the historical average, leading to speculation regarding a delay in the completion of Brazil’s coffee harvest. Meanwhile, ICE’s Arabica inventories fell to a low of 0.49 million bags in September. The impact of these positive factors was more profound on the prices of the Arabicas, particularly the Brazilian Naturals which rallied by 5.3% and 81.%, respectively.

Nevertheless, this rally was halted and reversed by the sharp weakening of the real against the US dollar. From 19 to 29 September the real depreciated by 3.2%, from 4.87 to 5.03, while the I-CIP fell by 7.1% over the same period. Once again, the negative impact was felt relatively more by the Arabicas (-8.1%) and particularly the Brazilian Naturals (-9.3%) as compared with Robustas (-5.9%). The price of the Robustas fell at a relatively slower rate due to Vietnam’s current dwindling supply (see Exports by Regions – All Forms of Coffee), with supply from the 2023/24 harvest still at least two months away in November at the earliest.

Exports by Coffee Groups – Green Beans
Global green bean exports in August 2023 totalled 9.36 million bags, as compared with 9.07 million bags in the same month of the previous year, up 3.2%. As a result, the cumulative total for 2022/23 to August is 102.9 million bags, as compared with 108.26 million bags over the same period a year ago, down 5.0%.

Shipments of the Other Milds decreased by 9.7% in August 2023 to 1.99 million bags from 2.2 million bags in the same period last year. As a result, the cumulative volume of exports continued to fall, decreasing by 12.2% in the first 11 months of coffee year 2022/23 to 20.56 million bags, versus 23.42 million bags over the same period in 2021/22.

Green bean exports of the Brazilian Naturals increased in August 2023, rising by 10.2% to 3.06 million bags. For the first 11 months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 31.5 million bags, down 8.0% from 34.22 million bags over the same period a year ago. Changes to the fortunes of the Brazilian Naturals are mainly due to changes in Brazil’s total green bean exports, the biggest producer and exporter of the Brazilian Naturals, which also increased in August 2023 (27.6%) to 3.35 million bags from 2.63 million bags in August 2022.

Exports of the Colombian Milds decreased by 2.1% to 0.84 million bags in August 2023 from 0.86 million bags in August 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 5.6% in August 2023. This is the fourteenth consecutive month of negative growth for the Colombian Milds and, as a result, the exports of this group of coffee for October 2022 to August 2023 were down 12.5%, at 9.9 million bags, as compared with 11.32 million bags in the first 11 months of coffee year 2021/22.

Green bean exports of the Robustas amounted to 3.47 million bags in August 2023, as compared with 3.22 million bags in August 2022, up 7.3%. This is the fifth consecutive month of positive growth for the Robustas and, as a result, the exports of this group of coffee for October 2022 to August 2023 were up 4.2%, at 40.94 million bags, as compared with 39.31 million bags in the first 11 months of coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In August 2023, South America’s exports of all forms of coffee increased by 13.0% to 4.98 million bags. This is the first positive growth rate for the region since the 0.3% expansion in June 2022. The source of both the positive and strength of growth is Brazil, which saw its exports increase by 24.4% to 3.67 million bags from 2.95 million bags in August 2022. More specifically, it was the Robustas from the origin, which in August increased by 388.1% to 0.7 million bags from 0.14 million bags, that drove the region’s positive growth. The August 2023 exports are Brazil’s highest on record for Robusta coffee, beating the 696,873 bags exported in December 2014.

Fundamentally, the region’s turnaround is due to the recent downturn in Asia and Oceania, especially in Vietnam, the world’s largest Robusta producer and exporter. Pointedly, Brazil is the largest producer and exporter of Robustas in South America, and it has been taking advantage of the reduced volume of Robustas coming out of Vietnam. It is pertinent to note that Brazil is the fifth biggest exporter of Robustas in the world, having shipped 1.87 million bags in coffee year 2021/22 as compared with the 25.44 million bags exported from Vietnam or the 4.89 million, 4.28 million and 4.03 million bags from Uganda, India and Indonesia, respectively, the second, third and fourth largest exporters. However, in August 2023, Brazilian Robusta exports were second only to Vietnam with 1.34 million bags. To put this into perspective, in August 2023 Brazil exported the equivalent of four-and-half months’ worth of Robustas in a single month (as measured against the total Robusta exports in coffee year 2021/22).

Exports of all forms of coffee from Africa increased by 10.9% to 1.37 million bags in August 2023 from 1.23 million bags in August 2022. For the first 11 months of the current coffee year, exports totalled 10.84 million bags as compared with 12.31 million bags in coffee year 2021/22, down 1.5%. This is the third consecutive month of positive growth rate for the region. The continued global demand for Robustas, as reflected in the latest cumulative positive growth rates for Robusta green bean exports, is the fundamental source of Africa’s positive export growth rate in August. However, like the situation in South America, the reduced volume from the Asia and Pacific region, and more pointedly Vietnam, explains this growth.

Uganda, the largest producer and exporter of Robusta coffee in Africa, took the opportunity to fill the gap in the market left by Vietnam, increasing its exports by 48.4% to 0.74 million bags in August 2023 from 0.5 million bags in August 2022. This represents the second largest monthly exports on record, just behind the 0.79 million bags exported in March 1973.

In August 2023, exports of all forms of coffee from Mexico and Central America were down 2.0% to 1.23 million bags as compared with 1.26 million in August 2022. As a result, total exports are down 2.6% from October 2022 to August 2023 at 14.57 million bags, as compared with 14.96 million bags for the same period a year ago. The relatively shallow negative growth rate of the region masked the dynamic changes at the individual country level.

Two origins experienced strong positive growth rates (Honduras and Nicaragua), with a combined 37.2% increase in August 2023, while three others experienced sharp negative growth rates (Costa Rica, Guatemala and Mexico), with a combined 20.5% decrease. Honduras and Nicaragua outperformed both the region and group of coffee (Other Milds) to which they predominantly belong in August. This may reflect their competitive edge over other origins in Mexico and Central America – the average export unit value of Arabica green beans for Honduras and Nicaragua was 157 US cents/lb for coffee years 2017/18–2021/22, while it was on average 63 US cents/lb higher for the others (excluding Cuba, Haiti and Jamaica) at 220 US cents/lb.

Exports of all forms of coffee from Asia and Oceania decreased by 14.9% to 2.72 million bags in August 2023 and but were up 1.3% to 41.28 million bags in the first 11 months of coffee year 2022/23. August’s downturn was mainly due to Vietnam, with exports down 23.6% to 1.44 million bags from 1.98 million bags. This is the lowest month of August exports since the 1.4 million bags shipped in 2012. The decrease can be attributed to the depletion of available supply, reflecting the strength of its exports in the first 10 month of the current coffee year, where between October 2022 and July 2023 Vietnam shipped 25.98 million bags –3.3% higher than the same period in coffee year 2017/18, a record exporting year when the origin shipped 29.73 million bags over the full year.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 4.6% in August 2023 to 0.89 million bags from 9.3 million bags in August 2022. In the first 11 months of coffee year 2022/23, a total of 10.46 million bags of soluble coffee were exported, representing a decrease of 5.7% from the 11.09 million bags exported in the same period during the previous coffee year.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 8.6% in August 2023, down from 9.2% for the same period a year ago. Brazil is the largest exporter of soluble coffee, having shipped 0.32 million bags in August 2023.

Exports of roasted beans were down 39.9% in August 2023 to 58,226 bags, as compared with 96,937 bags in August 2022. The cumulative total for coffee year 2022/23 to June 2023 was 0.66 million bags, as compared with 0.77 million bags in same period a year ago.

Production and Consumption
Under the current circumstances, the estimates and outlook of production and consumption for coffee years 2021/22 and 2022/23 remain the same.

World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in a number of key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23. Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23. The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year.

Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built up during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22. Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). The full CRO can be downloaded from the ICO website: icocoffee.org. For further information, contact the Statistics Section at stats@ico.org.

The post Arabicas drop slightly while Robustas remain firmly above 120.00 US cents/lb appeared first on Tea & Coffee Trade Journal.

In 2022, the Russian coffee market experienced a price shock, as the average price per cup jumped by 27% to 36%, the Russian issue of Forbes reported, citing local analysts. Although the price had steadily grown since 2019, last year’s hike was outstanding.

Russia consumes 1.5kg of coffee per capita, importing around 230,000 tonnes of coffee beans per year, estimated Marina Petrova, CEO of Petrova Five Consulting, a Moscow-based think tank.

Over the past several years, the consumption growth has been secured by multiple coffee-to-go chains, said Albina Koryagina, partner with a Moscow-based consultancy NEO-Center. These companies put a lot of effort into waking up the market – working on the brink of profitability for years – and eventually succeeded, introducing a coffee-to-go culture to large masses of the Russian population, she explained.

As a result, coffee has become a vital product for Russians, historically perceived as tea lovers, Koryagina said. For ordinary citizens, the price of coffee is an essential indicator of food inflation and the general state of play in the country’s economy. The Russian federal statistical service Rosstat calculates the monthly food inflation ratio valuing the coffee as high as gasoline, sausages and hot water supply.

Almost half of the coffee beans imported to Russia come from Vietnam, and nearly a quarter from Brazil. Both countries have not joined Western sanctions against the Russian economy, but imports suffered nonetheless.

Price matters

As Russia does not grow coffee, the price dynamics on the market are usually tightly linked to the Russian ruble’s exchange rate. In 2022, however, the correlation between these trends surprisingly disappeared, and they even went in the opposite direction. Between February and June 2022, the Russian ruble strengthened from 84 to USD $1.00 to 58 to USD $1.00, while coffee prices skyrocketed.

To some extent, this was associated with a hike in global prices, said Ramaz Chanturia, head of the Russian tea and coffee association Roschaicoffee. Low coffee harvests in Vietnam, Brazil and Indonesia contributed to this trend, he added.

A logistics crunch was another, likely much more important factor. Before 2022, almost all coffee was imported to Russia from Europe. Last year, the sanctions blocked this route, forcing importers to seek alternative supply schemes. Some options were found, but they reportedly appeared to be way more expensive, especially since leading global cargo carriers suspended working with Russia, and almost the entire country’s banking system is disconnected from the SWIFT network.

This year, imports are sustaining new blows. The Russian ruble has weakened by 26% this year as a result of a collapse in export revenues and growing budget spending, making it the third worst-performing global currency this year. During the last 12 months, the Russian ruble lost nearly half its value against the hard currency, notching a psychological barrier of 100 per USD.

As a result, in the next few months, Russian analysts anticipate a new price jump of around 20% to 25%.

Coffee changes taste

In this background, Russian retailers and coffee chains have to seek cost-saving solutions in order to keep their prices as low as possible.

Petrova said that the Russian coffee market is undergoing some big changes. She said that even Russian retailers like Azbuka Vkusa, normally focused on selling premium food, started selling blends with a 50% to 80% share of robusta, while in the previous year, this figure was never higher than 20%. There are also signs that Russian importers have abandoned arabica owing to low demand.

“Distributors’ stocks of high-quality raw materials are running out, and consumers will soon experience changes in the taste of their usual coffee-based drinks,” Petrova said.

The daily morning cup of quality coffee may well become an unattainable dream for a large portion of the Russian population in the near future, admitted Nikolay Vavilov, senior analyst of Total Research, a Moscow-based think tank.

In addition, a mass exodus of Western brands from Russia continues. Recently. JDE Peet’s announced plans to remove its tea and coffee brands: Jacobs, L’Or, Tassimo, Douwe Egberts, Pickwick and Senseo from the country.

The worst part is that all the negative trends hurting the Russian coffee market seem only to gain steam. Alexander Miller, a Russian independent economist, assumed that the Russian ruble could plummet to 130 by the end of the year, owing to an overall gloomy economic outlook. At the same time, Russian logistics companies complained that the external conditions remain harsh for their business, and they must be increasingly creative to keep the imports running.

It is yet to be seen whether the current crisis will lower the Russian coffee consumption figures, but this scenario also should not be ruled out.

• Vladislav Vorotnikov is a Batumi, Georgia-based multimedia B2B freelance journalist writing about the tea and coffee industry since 2012.

The post Russian coffee lovers brace for tough times appeared first on Tea & Coffee Trade Journal.

The ICO Composite Indicator Price (I-CIP) averaged 154.53 US cents/lb in August, posting a median value of 152.10 US cents/lb and fluctuating between 148.79 and 163.62 US cents/lb.

The Colombian Milds-Other Milds decreased by 1.6% and 3.5%, to 187.55 and 186.73 US cents/lb, respectively, in August 2023. Accentuated by a greater falling rate, the Other Milds fell back below the Colombian Milds. The Brazilian Naturals-Robustas both contracted by 3.0% and 2.3%, reaching an average of 154.66 and 124.62 US cents/lb, respectively. ICE’s New York market fell by 1.9%, whilst the London Futures market shrank by 2.0 % to 156.56 and 111.34 US cents/lb, respectively.

The Colombian Milds-Other Milds differential pivoted from –2.91 to 0.82 US cents/lb, returning to the positive after an inverted differential in July 2023. On the one hand, the Colombian Milds-Brazilian Naturals differential grew 5.8% to 32.89 US cents/lb, whilst the Colombian Milds-Robustas differential contracted 0.1% from July to August 2023, averaging 62.93 US cents/lb. Meanwhile, the Other Milds-Brazilian Naturals, Other Milds-Robustas and Brazilian Naturals-Robustas differentials contracted by 5.7, 5.8 and 5.9%, reaching 32.07, 62.11 and 30.04 US cents/lb, respectively.

In August 2023, the Colombian Milds-Other Milds Arabica differential had been narrowing considerably and, after thirty-four business days of negative differentials, this trend was reversed on 10th August. The Colombian Milds-Other Milds Arabica differential closed August on a one-month high, though it has not reached such positive lows in four and a half years. In late July and August 2023, the Arabicas-Robusta price movements recoupled, moving once again in tandem. Since April 2023, the price movements of the Arabicas and Robusta were decoupled under price substitution-related pressure, where demand for higher-end qualities has waned in favour of more competitively-priced coffees. However, the recoupling appears to indicate that the price differentials are now sufficiently narrow, and relative price-driven changes in demand (Arabica versus Robusta) may have come to an end.

Arbitrage, as measured between the London and New York Futures markets, narrowed by 1.6% to 45.23 US cents/lb in August 2023. This marks the lowest point since June 2020, where arbitrage sat at 44.73 US cents/lb.

Intra-day volatility of the I-CIP followed a consistent downtrend, reaching 7.0%, a 0.8 percentage point decrease between July and August 2023. The Other Milds presented the strongest volatility decrease, with a 3.7 percentage point drop, averaging 7.3% for the month of August. The Colombian Milds’ and Brazilian Naturals’ volatility also contracted to 7.5% and 8.8%. Meanwhile, the Robustas’ volatility dropped by 2.3 percentage points to 8.7% from July to August 2023, whilst the London futures market’s volatility increased by 0.2 to 9.4%. However, the New York futures market’s volatility moved in the opposite direction from London, retracting by 0.5 percentage points and reaching 8.6% for New York.

The New York and London certified stocks decreased in tandem by 3.0% and 34.6%, respectively, closing in at 0.57 million 60-kg bags, whilst certified stocks of Robusta coffee reached 0.58 million 60-kg bags, the lowest in over 20 years.

Downward pressure on prices could be attributed to the lack of aggressive buying of green coffee through the world. Indeed, for the current and previous coffee years (2021/22 and 2022/23), a combined underproduction of 14.4 million 60-kg bags is estimated. At present, there is an apparent decoupling between consumption and exports. There is little evidence of the former falling, while the latter for the current coffee year is down 5.7%. A plausible explanation could be the drawing down of stocks. During the Covid-19 pandemic, buyers, roasters and traders would have built up large stocks of coffee that must now be utilised before they perish. This may help to explain why exports are falling, coffee year on coffee year, thus applying negative pressure on the I-CIP. The broad drawdown of stocks is perhaps, further illustrated by the historic lows of the ICE stocks.

Exports by Coffee Groups – Green Beans
Global green bean exports in July 2023 totalled 9.31 million bags, as compared with 9.3 million bags in the same month of the previous year, up 0.1%. As a result, the cumulative total for 2022/23 to July is 93.56 million bags versus 99.2 million bags over the same period a year ago, down 5.7%.

Shipments of the Other Milds decreased by 13.7% in July 2023 to 2.20 million bags from 2.55 million bags in the same period last year. As a result, the cumulative volume of exports continued to fall, decreasing by 12.2% in the first 10 months of coffee year 2022/23 to 18.64 million bags versus 21.22 million bags over the same period in 2021/22.

Green bean exports of the Brazilian Naturals increased in July 2023, rising by 2.8% to 2.6 million bags. For the first 10 months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 28.4 million bags, down 9.7% from 31.45 million bags over the same period a year ago. Changes to the fortunes of the Brazilian Naturals are mainly due to changes in Brazil’s total green bean exports, the biggest producer and exporter of the Brazilian Naturals, which also increased in July 2023 (10.8%) to 2.7 million bags from 2.43 million bags in July 2022.

Exports of the Colombian Milds decreased by 8.1% to 0.93 million bags in July 2023 from 1.01 million bags in July 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 16.0% in July 2023. This is the thirteenth consecutive month of negative growth for the Colombian Milds and, as a result, the exports of this group of coffee for October 2022 to July 2023 were down 12.9%, at 9.11 million bags from 10.46 million bags in the first 10 months of coffee year 2021/22.

Green bean exports of the Robustas amounted to 3.59 million bags in July 2023, as compared with 3.22 million bags in July 2022, up 11.6%. This is the fourth consecutive month of positive growth for the Robustas and, as a result, the exports of this group of coffee for October 2022 to July 2023 were up 3.8%, at 37.45 million bags, as compared with 36.08 million bags in the first 10 months of coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In July 2023, South America’s exports of all forms of coffee decreased by 2.2% to 4.16 million bags, mainly driven by Colombia and Peru, which saw their exports fall by 17.1% and 37.5%, respectively. For Colombia, the latest downturn is the thirteenth consecutive month of negative growth, the second longest since the 22-month long streak observed between July 2008 and March 2010. As a result, Colombia’s exports for the first 10 months of coffee year 2022/23 are down to 8.79 million bags, the lowest level over the same 10-month period since coffee year 2012/13, when 7.24 million bags of coffee were shipped from the origin. Issues with local production, caused by meteorological factors, were the reason behind the downturn in exports for much of the current coffee year.

However, since June 2023, price substitution appears to be the main driver of the downturn in exports, with demand switching between the Arabicas, away from the Colombian Milds, of which Colombia is the largest producer, to the Other Milds. In Peru, the weather also played a part in the sharp decrease in exports. The Peruvian National Institute of Statistics and Informatics (INEI) reported that increased rainfall was behind the 1.9% decrease in production in June 2023, which may have filtered through to exports as a reduced availability of supply. However, the magnitude of the decrease in July 2023 is a more reflection of the 64.7% increase in July 2022 – the largest volume of July exports in the last 10 years (0.4 million bags versus an average 0.34 million bags (2013-2022)).

Exports of all forms of coffee from Africa decreased by 1.1% to 1.37 million bags in July 2023 from 1.39 million bags in July 2022. For the first 10 months of the current coffee year, exports totalled 10.84 million bags as compared with 11.27 million bags in coffee year 2021/22, down 3.8%. Once again, however, the relatively shallow negative growth rate of the region masked the dynamic changes at the individual country level. Two origins experienced strong positive growth rates (Tanzania and Uganda), with a combined 23.6% increase in July 2023, while two others experienced sharp negative growth rates (Côte d’Ivoire and Ethiopia), with a combined 26.7% decrease. In Ethiopia, contract disputes arising out of a mismatch between the local purchasing prices and the global market prices continue to negatively impact the volume exports, with exporters withholding the coffee until the disputes are resolved. Uganda’s exports increased by 12.0% in July, which were driven by a good crop harvest in South-Western region, and exporters releasing their stocks.

In July 2023, exports of all forms of coffee from Mexico and Central America were up 9.4% to 1.66 million bags as compared with 1.51 million in July 2022. As a result, total exports are down 1.8% for October 2022-July 2023 at 13.46 million bags, as compared with 13.71 million bags in the same period a year ago. Honduras was the main driver of the positive growth in July 2023.

Exports of all forms of coffee from Asia and Oceania decreased by 6.2% to 3.01 million bags in July 2023 and but were up 2.7% to 38.57 million bags in the first 10 months of coffee year 2022/23. July’s downturn was due to the top four origins of the region, India (-3.5%), Indonesia (-9.7%), Papua New Guinea (-25.9%) and Vietnam (5.1%).

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 16.6% in July 2023 to 0.84 million bags from 1.0 million bags in July 2022. In the first 10 months of coffee year 2022/23, a total of 9.58 million bags of soluble coffee were exported, representing a decrease of 5.7% from the 10.16 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 9.2% in July 2023, which matched the year-ago period. Brazil is the largest exporter of soluble coffee, shipping 0.31 million bags in July 2023.

Exports of roasted beans were down 12.7% in July 2023 to 57,299 bags, as compared with 65,601 bags in July 2022. The cumulative total for coffee year 2022/23 to June 2023 was 0.6 million bags, as compared with 0.67 million bags in same period a year ago.

Production and Consumption
Under the current circumstances, the estimates and outlook of production and consumption for coffee years 2021/22 and 2022/23 remain the same. World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in a number of key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23.

Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23. The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year. Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built up during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22.

Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). For the full report, visit: icocoffee.org.

The post Robusta prices hit near record highs in August appeared first on Tea & Coffee Trade Journal.

The ICO Composite Indicator Price (I-CIP) lost 7.2% from June 2023 to July 2023, averaging 171.25 US cents/lb for the latter, whilst posting a median value of 158.4 US cents/lb. In July 2023, the I-CIP fluctuated between 155.65 and 162.64 US cents/lb.

Average prices for all group indicators decreased in July 2023, with the Colombian Milds suffering the heaviest loss, decreasing by 10.0% and averaging 190.58 US cents/lb. The Robustas, once again, performed the best, being down only 3.4% and averaging 127.58 US cents/lb. The Other Milds and the Brazilian Naturals decreased by 6.7% and 9.6%, to an average 193.49 and 159.5 US cents/lb, respectively, in July 2023. ICE’s New York and London Futures markets fell by 8.6% and 4.7% to 159.57 and 113.62 US cents/lb, respectively.

For the I-CIP and Arabicas prices, July was a month of two halves: losses followed by recoveries. Between 3 and 18 July 2023, the average Arabicas price had dropped 2.8%, falling to 176.97 US cents/lb from 182.01 US cents/lb. However, between 18 and 31 July, the average price gained 5.2% to 186.23 US cents/lb. For the I-CIP, the movements were –2.0% and 3.6%, averaging 157.96 US cents/lb and 160.11 US cents/lb, respectively. The recovery of the Arabicas and I-CIP was led by the Brazilian Naturals, which fell by 3.5% and later rose by 6.0% from an average 158.59 US cents/lb to 160.71 US cents/lb, over the same period.

The swings of the Brazilian Naturals are explained by two factors: (i) news emerging from Brazil which suggests that the current harvest is progressing ahead of schedule, versus the previous year’s rate; and (ii) the strengthening of the Real. Cooxupe, Brazil’s coffee export cooperative, reported that the origin’s harvest was 58.8% completed as of 21 July, ahead of the 52.6% completed at the same time last year, which would have exerted downward pressure on the Brazilian Naturals’ price. However, the Real reached its highest level against the US dollar in 14 months by the end of July. Moreover, it strengthened to R $4.73 on 31 July from R$4.81 on 18 July, which exerted a greater upward pressure on the Brazilian Naturals’ price that overwhelmed the downward pressure of the better harvest progress.

Differentials
The Colombian Milds-Other Milds differential contracted by 165.2% to –2.91 US cents/lb. The Colombian Milds-Brazilian Naturals and Colombian Milds-Robustas differentials both contracted 12.1% and 21.0% from June to July 2023, averaging 31.09 and 63.0 US cents/lb in July, respectively. The Other Milds-Brazilian Naturals differential was the only differential to make a gain in July 2023, increasing by 10.0%, averaging 34.0 US cents/lb. The Other Milds-Robustas and Brazilian Naturals-Robustas differentials contracted by 12.4% to 65.91 US cents/lb and by 16.9% to 45.95 US cents/lb, respectively.

The negative Colombian Milds-Other Milds differential in July 2023 was the first since February 2019, when the delta fell to –0.52 US cents/lb. The movements of coffee prices, and all goods and services, reflect their supply and demand situation. However, the narrowing and drop to negative of the Colombian Milds-Other Milds differential was, it appears, more an issue with demand. Demand for the Colombian Milds has decreased in the current coffee year to date, as expressed in monthly exports, down 2.9% and 12.8% for the first nine months, while the numbers for the Other Milds were down 2.3% and 10.6%, respectively, in the same period. At the beginning of the coffee year, the decreasing demand for the Colombian Milds reflected supply issues in Colombia, the group’s largest origin and, perhaps, a much broader price substitution.

Colombia’s output fell by 12% in October 2022, and was down 8% for the year to date in June 2023. The latter decrease appears to have been driven by both the higher price of the Colombian Milds versus the Other Milds, and the high cost of living. In October 2022, inflation in the US and Eurozone, the two biggest markets for both types of Milds, stood at 7.7% and 10.6%, respectively. Meanwhile, benchmark interest rates were raised to near zero at the beginning of calendar year 2022, but in October/November stood at 2.75% and 1.5%. These combined factors would have caused demand to shift to more competitive growths, leading to a relatively decelerated fall in price of the Other Milds as compared with the Colombian Milds and the negative differential.

Arbitrage and Volatility
Arbitrage, as measured between the London and New York Futures markets, contracted by 16.9% to 45.95 US cents/lb in July 2023 as the Robusta growth rate outstripped the New York Market. This marks the lowest point since June 2020, where arbitrage sat at 44.73 US cents/lb. Intra-day volatility of the I-CIP followed a consistent downtrend, reaching 7.8%, a 0.3 percentage point decrease between June and July 2023. The Robustas presented the only positive volatility increase among the physical prices, with a 0.8 percentage point expansion, averaging 9.0% for the month of July.

The Brazilian Naturals presented the largest decrease in volatility, falling by 0.4 percentage point to 9.1% July from June 2023, while the Colombian Milds’ and Other Milds’ volatilities contracted to 8.1% and 11.0, respectively. The volatilities in the Futures markets moved in opposite directions from one another, retracting by 0.5 and falling to 9.1% in New York, whilst the Robusta contraction increased to 9.2% in July 2023, a 1.0 percentage point increase.

The New York and London certified stocks decreased in tandem by 2.9% and 29.4%, respectively, closing in at 0.58 million 60-kg bags, whilst certified stocks of Robusta coffee reached 0.89 million 60-kg bags.

Exports by Coffee Groups – Green Beans
Global green bean exports in June 2023 totalled 9.39 million bags, as compared with 10.06 million bags in the same month of the previous year, down 6.7%. The downturn was driven by the Arabicas. This is the seventh consecutive month of decline for total exports of green beans since the start of coffee year 2022/23. As a result, the cumulative total for 2022/23 to June is 84.02 million bags, as compared with 89.88 million bags over the same period a year ago, down 6.5%.

Shipments of the Other Milds decreased by 19.3% in June 2023 to 2.32 million bags from 2.88 million bags in the same period last year. As a result, the cumulative volume of exports continued to fall, decreasing by 13.1% in the first nine months of coffee year 2022/23 to 16.23 million bags versus 18.67 million bags over the same period in 2021/22.

Green bean exports of the Brazilian Naturals fell in June 2023, decreasing by 7.6% to 2.5 million bags. For the first nine months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 25.76 million bags, down 10.9% from 28.9 million bags over the same period a year ago. Changes to the fortunes of the Brazilian Naturals are mainly owing to changes in Brazil’s green bean exports, the biggest producer and exporter of the Brazilian Naturals, which also fell in June 2023 (–16.6%) to 2.29 million bags from 2.75 million bags in June 2022.

Exports of the Colombian Milds decreased by 13.0% to 0.84 million bags in June 2023 from 0.97 million bags in June 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 19.3% in June 2023. This is the 12th consecutive month of negative growth for the Colombian Milds and, as a result, the exports of this group of coffee for October 2022 to June 2023 were down 13.4%, at 8.18 million bags, as compared with 9.45 million bags in the first nine months of coffee year 2021/22. Green bean exports of the Robustas amounted to 3.72 million bags in June 2023, as compared with 3.51 million bags in June 2022, up 6.1%. This is the third consecutive month of positive export growth for the Robustas and, as a result, exports of this group of coffee for October 2022 to June 2023 were up 3.0%, at 33.86 million bags, as compared with 32.86 million bags in the first nine months of coffee year 2021/22. As a result, the Robustas’ share of the total green bean exports for October 2022 – June 2023 increased to 40.3% from 36.6% in the same period a year ago.

Exports by Regions – All Forms of Coffee
In June 2023, South America’s exports of all forms of coffee decreased by 15.5% to 3.65 million bags, driven by the two main origins of the region, Brazil and Colombia, whose combined exports fell by 16.6%. Brazil and Colombia saw their respective shipments of coffee decrease by 15.5% and 20.3% in June 2023, falling to 2.64 million and 0.76 million bags. Brazil’s export performance remains low, it appears, tied to relatively limited supply following two consecutive years of below-par harvests, despite the current harvest progressing ahead of schedule (see Group Indicator Prices). For Colombia, issues with local production are behind the downturn in exports for much of the current coffee year. However, there is another reason behind the decreasing exports, which now appears to be coming to the fore, and that is the impact of price substitution. Demand is switching between the Arabicas, away from the Colombian Milds, of which Colombia is the largest producer, to the Other Milds (see Differentials).

Exports of all forms of coffee from Africa decreased by 0.6% to 1.27 million bags in June 2023 from 1.28 million bags in June 2022. For the first nine months of the current coffee year, exports totalled 9.47 million bags as compared with 9.88 million bags in coffee year 2021/22, down 4.2%. The low negative growth rate of the region, however, masked dynamic changes at the individual country level. Four origins experienced positive growth rates (Burundi, Kenya, Tanzania and Uganda), with a combined 14.0% increase in June 2023, while two others experienced negative growth rates (Côte d’Ivoire and Ethiopia) with a combined 18.8% decrease. In Ethiopia, contract disputes arising out of a mismatch between the local purchasing prices and the global market prices continue to negatively impact the volume exports, with exporters withholding the coffee until the disputes are resolved. For Burundi, the origin is benefitting from the price substitution-led demand between the Colombian Milds and Other Milds, while Uganda’s 6.3% increase in June 2023 reflected the good harvest in the south-western region of the country.

In June 2023, exports of all forms of coffee from Mexico and Central America were down 4.6% to 1.86 million bags as compared with 1.95 million in June 2022. This latest month of negative growth is the sixth in the first nine months of the current coffee year. As a result, total exports are down 2.5% for October 2022 – June 2023 at 11.87 million bags, as compared with 12.17 million bags in the same period a year ago. Guatemala and Mexico were the main drivers of the negative growth in June 2023, down 16.7% and 21.6%, to 0.4 million bags and 0.28 million bags from 0.48 million bags and 0.36 million bags, respectively, in June 2022.

Exports of all forms of coffee from Asia and Oceania increased by 0.5% to 3.63 million bags in June 2023 and were up 2.9% to 35.35 million bags in the first nine months of coffee year 2022/23. Vietnam is the main source of the region’s positive growth rate, with exports for coffee year 2022/23 to date being up 6.0%, the country having shipped 24.13 million bags as compared with 22.76 million bags over the same period a year ago. The origin’s strong export performance so far reflects the ongoing high cost of living-led shift in demand towards cheaper Robustas (see Differentials for the Arabicas-Robustas delta). However, the moving 12 months’ total exports have been increasing at a decelerating rate, slowing from 12.5% in October 2022 down to 4.2% in June 2023. This suggests that the narrowing of the Arabicas-Robustas price differentials may be having an impact on the demand for coffee from Vietnam, the largest producer and exporter of Robusta coffee, with the ratio of the blend in soluble coffee swinging back towards a relatively higher use of Arabica.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 8.1% in June 2023 to 0.94 million bags from 1.02 million bags in June 2022. In the first nine months of coffee year 2022/23, a total of 8.86 million bags of soluble coffee were exported, representing a decrease of 3.2% from the 9.16 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 9.5% in June 2023, up from 9.2% in the same period a year ago. Brazil is the largest exporter of soluble coffee, shipping 0.34 million bags in June 2023.

Exports of roasted beans were up 11.3% in June 2023 to 72,237 bags, as compared with 71,282 bags in June 2022. The cumulative total for coffee year 2022/23 to June 2023 was 0.56 million bags, as compared with 0.61 million bags in same period a year ago.

Production and Consumption
The estimates and outlook for production and consumption for coffee years 2021/22 and 2022/23 remain the same.

World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in a number of key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23.

Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23. The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year. Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand accumulated during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22.

Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from nonproducing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). The CRO offers an insight into the factors moving the global coffee industry in the most recent past and draws out the potential events that may drive the industry in the near future. The full CRO can be downloaded from the ICO website: www.icocoffee.org.

The post ICO reports coffee prices recover in July after first falling appeared first on Tea & Coffee Trade Journal.

Broadly, the upward trend has the support of the fundamentals, with the global coffee market in deficit in coffee year 2021/22 and this situation expected to be repeated in coffee year 2022/23 (see Production and Consumption). The impetus behind the rally from the last days of March 2023 to the beginning of the third week of April 2023 can be attributed to the reinforcement of the support of the fundamentals from several market-driving events and announcements (see Exports by Regions – All Forms of Coffee). However, the downturn of the I-CIP, seen since the beginning of the third week of April 2023, appears mainly due to the strengthening US dollar. From 23 March to 28 April 2023, the Brazilian real (R$) moved from a low of R$5.30 on 23 March to a peak of R$4.91 on 14 April, before weakening again to an average of R$5.03 between 15 and 28 April against the US dollar.

Average prices for all group indicators increased in April 2023, with the Robustas averaging an 8.7% gain at 115.70 US cents/lb. Colombian Milds and Other Milds increased by 4.3% and 3.2%, to 234.85 and 229.56 US cents/lb, respectively, in April 2023. Brazilian Naturals lead the way amongst Arabicas, climbing 4.4% and reaching an average of 195.26 US cents/lb. The International Coffee Exchange’s (ICE) New York market expanded 6.3%, whilst the London Futures market grew 9.1% to 187.30 and 105.43 US cents/lb, respectively.

Colombian Milds-Other Milds differential presented resilient growth, rising 84.3% to 5.30 US cents/lb. Colombian Milds-Brazilian Naturals differential also gained 3.6% from March to April 2023, averaging 39.60 US cents/lb in April, whilst Colombian Milds-Robustas grew 0.3% to 119.15 US cents/lb for the same period. Conversely, Other Milds-Brazilian Naturals differential lost 2.9%, averaging 34.30 US cents/lb, whilst Other Milds-Robustas also shrank by 1.7% to 113.86 US cents/lb. With the most moderate loss, Brazilian Naturals-Robustas dropped 1.2% to 79.56 US cents/lb.

Arbitrage, as measured in between the London and New York Futures markets, expanded by 2.9% to 81.88 US cents/lb in April 2023.

Intra-day volatility of the I-CIP is stabilising and reached 8.7% with a marginal increase of 0.6 percentage points between March and April 2023. Robustas presented the strongest volatility increase, averaging 7.7% for the month of April 2023, a 1.4 percentage point expansion. Echoing this increased volatility were the New York Futures and London markets, where 0.1 and 0.8 percentage points were gained, averaging 11.1% and 7.9%, respectively, for April 2023. Whilst volatility of the Other Milds grew 0.4 percentage points to 9.2%, the Colombian Milds also increased by 0.3 percentage points to 9.0%. Lastly, Brazilian Naturals saw an 0.5 percentage point increase in volatility from March to April 2023.

The New York certified stocks decreased 7.9% from the previous month, closing in at 0.74 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.31 million 60-kg bags, representing an increase of 3.1%.

Exports by Coffee Groups – Green Beans
Global green bean exports in March 2023 totalled 10.90 million bags, as compared with 12.06 million bags in the same month of the previous year, down 9.6%. The downturn was spread across all coffee groups. As a result, the cumulative total exports of green beans for coffee year 2022/23 is decreasing at an accelerated rate, down 6.1%, as compared with the 5.2% fall recorded for the first five months of the current coffee year. The cumulative total for 2022/23 to March is 56.26 million bags, as compared with 59.92 million bags over the same period a year ago.

Shipments of the Other Milds decreased by 17.1% in March 2023 to 2.11 million bags from 2.55 million bags in the same period last year. This is the sixth consecutive month of negative growth for green bean exports of Other Milds since the start of the new coffee year. As a result, the cumulative volume of exports fell by 18.2% in the first six months of coffee year 2022/23 to 8.86 million bags versus 10.83 million bags over the same period in 2021/22.

Green bean exports of Brazilian Naturals fell in March 2023, falling by 13.5% to 3.08 million bags. For the first six months of coffee year 2022/23, green bean exports of Brazilian Naturals amounted to 18.61 million bags, down 7.8% from 20.18 million bags over the same period a year ago. Changes to the fortunes of Brazilian Naturals are mainly changes in Brazil’s green bean exports, the biggest producer and exporter of Brazilian Naturals, which also fell in March 2023 (-14.8%) to 2.78 million bags from 3.27 million bags in March 2022.

Exports of Colombian Milds decreased by 17.4% to 0.96 million bags in March 2023 from 1.17 million bags in March 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 19.2% in March 2023. This is the ninth consecutive month of negative growth for Colombian Milds and, as a result, the exports of this group of coffee for October 2022 to March 2023 were down 14.7%, at 5.63 million bags, as compared with 6.60 million bags in the first six months of coffee year 2021/22.

Green bean exports of Robustas amounted to 4.74 million bags in March 2023, as compared with 4.78 million bags in March 2022, down 0.8%. In the first six months of coffee year 2022/23, 23.17 million bags of Robustas were exported as compared with 22.31 million bags in the same period in 2021/22.

Exports by Regions – All Forms of Coffee
In March 2023, South America’s exports of all forms of coffee decreased by 17.3% to 4.13 million bags, driven by the three main origins of the region, Brazil, Colombia and Peru, which saw their combined exports fall by 17.9%. The two major origins of the region, Brazil and Colombia, saw their respective shipments of coffee decrease by 14.3% and 19.2% in March 2023, falling to 3.1 million and 0.92 million bags, ie, the fourth and ninth consecutive months of negative growth, respectively.

The off-season and smaller harvests in 2020/21 and 2021/22 have been put forward as explanations for Brazil’s falling exports by Cecafé, the Brazilian Coffee Exporters Council, while in Colombia both an adverse weather-driven fall in supply and a 10% decrease in production in March 2023, continue to explain the decreasing exports.

Peru is continuing to see its exports fall at a significantly faster rate, plunging by 76.5% in March 2023. Again, erratic weather played a part in this downturn, in addition to social unrest in the main producing areas (Cajamarca, Junín and San Martín) which saw their roads blocked. However, the main culprit behind the magnitude of the fall in exports is mechanical; 4.60 million bags of all forms of coffee were exported in coffee year 2021/22, the second largest in volume on record, just behind the 4.69 million bags exported in coffee year 2011/12, increasing by 44.8% as compared with coffee year 2020/21. Moreover, for the first three months of the calendar year (January to March 2022), exports increased by 245.8% at 1.00 million bags, the largest Q1 shipment on record, and 57.4% higher than the next biggest, 0.64 million bags, recorded in 2012. Given these record breaking numbers the Q1 data for 2023 are, inevitably, suffering in comparison.

Exports of all forms of coffee from Africa decreased by 5.0% to 1.12 million bags in March 2023 from 1.18 million bags in March 2022. For the first six months of the current coffee year, exports totalled 6.35 million bags as compared with 6.33 million bags in coffee year 2021/22, up 0.3%. Côte d’Ivoire and Kenya are the main drivers behind the fall in the region’s exports, with shipments of coffee decreasing by 41.4% to 0.12 million bags as compared with 0.21 million bags in March 2022, and by 17.7% to 58,340 bags from 70,849 bags in March 2022, respectively. However, Burundi, Rwanda and Uganda served as counterweights that tempered the severity of the region’s downturn, with their exports up 86.7%, 249.2% and 2.0%, respectively.

In March 2023, exports of all forms of coffee from Mexico and Central America were down 15.4% to 1.75 million bags as compared with 2.07 million in March 2022. This latest month of negative growth is the fifth in the first six months of the current coffee year, with the only instance of positive growth seen in February 2023. As a result, for the first six months of the current coffee year, exports are down at 11.8%, totalling 5.78 million bags as compared with 6.56 million bags from October 2021 to March 2022. Of the top six origins, five saw their exports fall in March 2023, with Guatemala suffering the heaviest decline (-44.9%), while Honduras was the only major origin with positive growth (2.0%). For Honduras, the increase seen in March is the third consecutive month of expansion, following 11 straight months of decreases between February and December 2022.

Exports of all forms of coffee from Asia and Oceania increased by 0.2% to 5.03 million bags in March 2023 and were up 2.5% to 24.05 million bags in the first six months of coffee year 2022/23. Indonesia is the main driver of the latest upturn, with exports increasing by 16.0% to 0.58 million bags from 0.50 million bags in March 2022, outweighing the 1.6% and 1.1% downturns of India and Vietnam, respectively.

Indonesia’s upturn in exports seemingly came in the face of evidence to the contrary; the ICO’s latest outlook for coffee year 2022/23 projected Indonesia’s production to be growing at a slower rate than its consumption, 1.1% versus 5.1%, thereby reducing the supply available for export. Moreover, earlier in the year, the Association of Indonesia Coffee Exporters and Industries projected a 20% fall in production due to excessive rain across the coffee growing regions, while severe rainfall was seen through much of the archipelago in the first four months of 2023. The double-digit expansion of exports in March is mainly explained by the strong on-off seasonality of Indonesia’s coffee exports, which is evident in both annual and monthly data (see Graph A). Thus, the 16.0% increase in March 2023 is more a reflection of March 2022 than a statement on the current status of Indonesia’s coffee industry or the world’s demand for its coffee.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 6.5% in March 2023 to 1.05 million bags from 1.13 million bags in March 2022. In the first six months of coffee year 2022/23, a total of 5.67 million bags of soluble coffee were exported, representing a decrease of 8.8% from the 6.22 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee was 10.1% (measured on a moving 12-month average) in March 2023, the same as it was in March 2022. Brazil is the largest exporter of soluble coffee, shipping 0.32 million bags in March 2023.

Exports of roasted beans were up 5.9% in March 2023 to 66,393 bags, as compared with 62,689 bags in March 2022. The cumulative total for coffee year 2022/23 to March 2023 was 358,640 bags, as compared with 399,479 bags in same period a year ago.

Production and Consumption
The estimates and outlook of production and consumption for coffee years 2021/22 and 2022/23 remain the same. World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in several key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23. Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23. The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year.

Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built up during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22. Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). The CRO offers an insight into the factors moving the global coffee industry in the most recent past and draws out the potential events that may drive the industry in the near future. The CRO can be downloaded from the ICO website: www.icocoffee.org. For further information, contact the Statistics Section at stats@ico.org.

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Research published by the BCA shows that the UK has a flourishing coffee industry – the nation drinks approximately 98 million cups of coffee every day, with the industry creating over 210,000 UK jobs. The BCA represents, promotes, and supports all aspects of the UK coffee trade – to the media, politicians, and the public. Minister Spencer signed the landmark 2022 agreement in London in the presence of the executive directors of the ICO and BCA, as well as key UK coffee industry representatives. The Agreement is the eighth of its kind since the first ICA, signed in 1962 at the United Nations in New York, which established the ICO with its headquarters in London. The ICO is the only intergovernmental organisation for coffee, bringing together exporting and importing governments to tackle the challenges facing the coffee sector through international co-operation.

The 2022 Agreement marks a gearshift in the way the ICO operates, for the first time in its 60-year history giving a more prominent role to the private sector in its decision making process, alongside national governments. The signing of the new ICA is particularly important to the UK, as the host State for the ICO and a key coffee-importing nation.

Upon the signing, the Rt Hon Mark Spencer MP, Food and Drink Minister, said, “I’m honoured to sign the International Coffee Agreement on behalf of the UK. We may be known for our tea, but we Brits drink almost 100 million cups of coffee every single day, worth around £5billion pounds per year to the economy, with the industry employing thousands of people around the country. This international treaty champions the industry globally, and I hope the UK can help continue its drive for new standards of sustainability for our coffee.”

Paul Rooke, executive director of the British Coffee Association, said, “The British Coffee Association warmly welcomes the UK’s signing of the 2022 International Coffee Agreement, demonstrating a real commitment from the Government to the future success of our industry. This new agreement seeks to strengthen the role of the private sector, within its overall objectives for a commercially and environmentally sustainable coffee industry.

Rooke continued, “Promoting consumer choice by maintaining a diverse range of coffee origins, while underpinning the need for a profitable income for producers, is an ambition which BCA works towards in close co-ordination with industry and other coffee associations. We see the ICO, and this updated agreement, as key components of delivering that ambition, and look forward to working with Government Departments and colleagues at ICO to ensure the UK plays a central role in securing a positive future for coffee.”

Commenting on behalf of the ICO, its executive director, Vanúsia Nogueira, said, “It’s a great honour to have with us the Rt Hon Mark Spencer, Minister of State for Food, Farming, and Fisheries, and Paul Rooke, executive director of the British Coffee Association, and we thank you for your leadership and your commitment to building a prosperous future for the coffee sector. Today, we celebrate a remarkable moment in the longstanding partnership between the International Coffee Organization and the United Kingdom, but also in the 60-year history of the ICO. The signature of the new International Coffee Agreement (ICA 2022) by the United Kingdom opens a new chapter in our relationship with our host country”.

She added that the ICA 2022 prioritises not only a strengthened cooperation between the ICO and signatory governments but also, for the first time, stronger partnerships with the private sector and civil society. “We are confident that today’s signature will contribute to bringing together coffee farmers in producing countries with industry and consumers in the United Kingdom. Today’s signature is only the beginning. Much challenging work lies ahead. I look forward to working with you to advance the coffee sector and to shape a successful future that is truly sustainable, resilient and inclusive.”

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Average prices for all group indicators decreased in March 2023, except for the Robustas. The Colombian Milds and Other Milds decreased by 5.5% and 3.2%, to 225.23 and 222.36 US cents/lb, respectively, in March 2023. However, the Brazilian Naturals lost 4.2% whilst the Robustas gained 2.5%, reaching an average of 187.02 and 106.49 US cents/lb. The London Futures market grew 2.5% whilst ICE’s New York market shrank by 2.6%.

The Colombian Milds-Other Milds led the way, shrinking 66.8% to 2.87 US cents/lb. Similarly, the Brazilian Naturals-Robustas and Colombian Milds-Robustas differentials both lost 11.7%, reaching 80.53 and 118.74 US cents/lb in March 2023. The Colombian Milds-Brazilian Naturals echoed this loss, closing in at 38.21 US cents/lb, a 11.6% loss from the month before. Presenting a more moderate loss, the Other Milds-Robustas differential contracted by 7.9%, closing the month at 115.87 US cents/lb. Conversely, the Other Milds-Brazilian Naturals differential expanded 2.3%, reaching 35.34 US cents/lb in March 2023. The arbitrage, as measured between the New York and London Futures market, contracted 8.2%, closing in at 79.57 US cents/lb in March 2023, from 86.67 US cents/lb in February 2023.

Intra-day volatility of the I-CIP decreased 0.6 percentage points between February 2023 and March 2023, reaching 8.1%. The Brazilian Naturals’ volatility presented the strongest volatility contraction, averaging 10.3% for the month of March 2023, a 1.8 percentage point loss. Echoing this reduction in volatility were the New York Futures and London markets, where 1.6 and 0.7 percentage points were lost, averaging 11% and 7.1%, respectively, for March 2023. Whilst volatility for the Other Milds remained stable at 8.8%, the Colombian Milds decreased by 0.5 percentage points to 8.7%. Conversely, the Robustas gained 0.1 percentage point of volatility from February to March, averaging 6.3% for the latter.

The New York certified stocks decreased 6.7% from the previous month, closing in at 0.80 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.27 million 60-kg bags, representing an increase of 7.2%.

Exports by Coffee Groups – Green Beans
Global green bean exports in February 2023 totalled 7.94 million bags, versus 9.95 million bags in the prior year month, down 20.23%. The downturn was spread across all coffee groups. As a result, the cumulative total exports of green beans for coffee year 2022/23 are decreasing at an accelerated rate, down 8.5%, as compared with the 5.5% decrease observed for the first four months of the current coffee year. The cumulative total for 2022/23 to February is 43.77 million bags as compared with 47.85 million bags over the same a year ago.

Shipments of the Other Milds decreased by 16.0% in February 2023 to 1.72 million bags from 2.04 million bags in the prior-year period. This is the fifth consecutive month of negative growth for green bean exports of the Other Milds since the start of the new coffee year. As a result, the cumulative volume of exports fell by 18.5% in the first five months of coffee year 2022/23 to 6.75 million bags from 8.28 million bags over the same period in coffee year 2021/22.

Green bean exports of the Brazilian Naturals fell in February 2023, diminishing by 33.0% to 2.34 million bags. For the first five months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 15.4 million bags, down 7.0% from 16.61 million bags over the same year-ago period. The shifting fortunes of the Brazilian Naturals reflected the changes in Brazil’s green bean exports, the biggest producer and exporter of the Brazilian Naturals, which fell 35.4% in February 2023 to 2.11 million bags from 3.27 million bags in February 2022.

Exports of the Colombian Milds decreased by 6.8% to 0.99 million bags in February 2023 from 1.06 million bags in February 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 5.7% in February 2023. As a result of the continued downturn, exports of the Colombian Milds from October 2022 to February 2023 were down by 14.1%, at 4.67 million bags, versus 5.43 million bags in the first five months of coffee year 2021/22.

Green bean exports of the Robustas amounted to 2.89 million bags in February 2023, as compared with 3.35 million bags in February 2022, down 13.7%. As a result, the shipments in the first five months of coffee year 2022/23 were down to 16.91 million bags from 17.53 million bags in the same period in coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In February 2023, South America’s exports of all forms of coffee decreased by 29.8% to 3.48 million bags, driven by the three main origins of the region, Brazil, Colombia and Peru, which saw their combined exports fall by 30.7%. The two major origins of the region, Brazil and Colombia, saw their respective shipments of coffee decrease by 32.5% and 5.1% in February 2023, falling to 2.41 million bags and 0.94 million bags. Peru is continuing to see its exports fall at a significantly faster rate, plunging by 44.6% in February 2023.

Exports of all forms of coffee from Asia and Oceania decreased by 15.3% to 2.99 million bags in February 2023 and were down 5.6% to 17.4 million bags in the first five months of coffee year 2022/23. Vietnam and India are the main drivers behind the latest downturn. The former’s exports are down by 25.3% to 1.79 million bags from 2.39 million bags in February 2022, while the latter’s also fell 9.5% to 0.49 million bags from 0.54 million bags in the same period.

Exports of all forms of coffee from Africa increased by 2.2% to 1.02 million bags in February 2023 from 1.0 million bags in February 2022. For the first five months of the current coffee year, exports totalled 5.23 million bags as compared with 5.15 million bags in coffee year 2021/22, up 1.4%.

Uganda is the main driver behind the jump in the region’s exports, with shipments of coffee increasing by 6.6% to 0.48 million bags as compared with 0.45 million bags in February 2022. Burundi, Côte d’Ivoire and the Democratic Republic of Congo are three other origins of note for February 2023, with their exports up 62.5%, 18.1% and 30.0%, respectively, adding to Uganda’s upward impetus within the region. Kenya was another notable origin in February 2023, though for different reasons, with exports down 43.5%.

In February 2023, exports of all forms of coffee from Mexico and Central America were up 2.4% to 1.42 million bags as compared with 1.39 million in February 2022. For the first five months of the current coffee year, however, exports remain down 10.1%, totalling 4.03 million bags as compared with 4.48 million bags in October–February 2021/22. However, the region’s latest export results broke the four consecutive months of negative growth thanks to Costa Rica (up 6.2%), Dominican Republic (up 95.6%), El Salvador (up 12.9%) and Nicaragua (up 35.1%).

Exports of Coffee by Forms
Total exports of soluble coffee increased by 5.8% in February 2023 to 0.92 million bags from 0.87 million bags in February 2022. In the first five months of coffee year 2022/23, a total of 4.59 million bags of soluble coffee were exported, representing a decrease of 11.2% from the 5.09 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee was 10.2% (measured on a moving 12-month average) in February 2023, up from 10.1% in February 2022. Brazil is the largest exporter of soluble coffee, shipping 0.3 million bags in February 2023.

Exports of roasted beans were up 6.2% in February 2023 to 50,140 bags, versus 47,212 bags in February 2022. The cumulative total for coffee year 2022/23 to February 2023 was 292,247 bags, as compared with 336,790 bags in same period a year ago.

Production and Consumption
World coffee production slipped by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in several key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23.

Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23. The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease the previous coffee year.

Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built-up during the Covid-19 years and sharp global economic growth of 6.0% in 2021, explains the bounce back in coffee consumption in coffee year 2021/22.

Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to undergo another year of deficit, with a shortfall of 7.3 million bags.

This outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). The CRO offers an insight into the factors moving the global coffee industry in the most recent past and draws out the potential events that may drive the industry in the near future. For further information on the CRO, please contact the Statistics Section at stats@ico.org.

For the full report, visit: icocoffee.org.

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The Colombian Milds and Other Milds increased by 8.9% and 11.1%, to 238.39 and 229.73 US cents/lb, respectively, in February 2023. However, the Brazilian Naturals and the Robustas gained 14.8% and 8.3%, reaching an average of 195.18 and 103.93 US cents/lb. The London Futures market grew 9.8% whilst ICE’s New York market shrank by 13.2%. The Colombian Milds-Other Milds and Colombian Milds-Brazilian Naturals differentials are leading the way, shrinking 28.8% and 11.6% to 8.66 and 43.21 US cents/lb, respectively. The Other Milds-Brazilian Naturals differential also lost 5.9%, averaging 34.55 US cents/lb for the month of February 2023.

Conversely, the Colombian Milds-Robustas and Other Milds-Robustas differentials grew by 9.4% and 13.6%, closing the month at 134.46 and 125.80 US cents/lb. The Brazilian Naturals-Robustas differential presented the strongest growth of 23.2% from January 2023 to February 2023, reaching 91.25 US cents/lb.

The arbitrage, as measured between the New York and London Futures market expanded 17.2%, closing in at 86.67 US cents/lb in February 2023, from 73.97 US cents/lb in January 2023.

Intra-day volatility of the I-CIP increased 0.1 percentage point between January 2023 and February 2023, reaching 8.7%. Robustas and the London Futures market were the least volatile amongst all group indicators, at 6.2% and 7.8%, respectively, in February 2023. The Brazilian Naturals’ volatility was the highest amongst the group indicators, averaging 12.1%, a 0.3 percentage point increase from the previous month. Whilst the volatility of the Colombian Milds stayed constant at 9.2%, the Other Milds, contracted 0.1 percentage point to 8.8%. The variation of the New York Futures market’s volatility increased by 0.3 percentage point, averaging 12.6% for the month of February 2023.

The New York certified stocks decreased by 5.1% from the previous month, closing in at 0.86 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.19 million 60-kg bags, representing an increase of 13.8%.

Exports by Coffee Groups – Green Beans
Global green bean exports in January 2023 totalled 8.69 million bags, as compared with 10.23 million bags in the same month of the previous year, down 15.0%. The downturn was spread across all coffee groups. As a result, the cumulative total exports of green beans for coffee year 2022/23 is decreasing at an accelerated rate, down 5.4%, as compared with 1.8% decrease for the first three months of the current coffee year. The cumulative total for 2022/23 to January is 35.86 million bags as compared with 37.9 million bags over the same period a year ago.

Shipments of the Other Milds decreased by 17.7% in January 2023 to 1.59 million bags from 1.93 million bags in the same period last year. This is the fourth consecutive month of negative growth for green bean exports of the Other Milds since the start of the current coffee year. As a result, the cumulative volume of exports fell by 18.1% in the first four months of coffee year 2022/23 to 5.11 million bags from 6.24 million bags over the same period in coffee year 2021/22. The region’s latest decline was due to a confluence of downturns in El Salvador (-63.4%), Guatemala (-40.5%) and Nicaragua (-23.2%) against upturns in Honduras (+2.8%) and Mexico (+106.7%), with the negative growth rates of the former group of origins overwhelming the gains of the latter.

Green bean exports of the Brazilian Naturals fell in January 2023, falling by 17.2% to 2.78 million bags. For the first four months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 13.1 million bags, down 0.1% from 13.11 million bags over the same period a year ago. Not surprisingly, the shifting fortunes of the Brazilian Naturals reflected the changes in Brazil’s green bean exports, the biggest producer and exporter of the Brazilian Naturals, which also fell in January 2023 (down 18.1%) to 2.52 million bags from 3.08 million bags in January 2022.

Exports of the Colombian Milds decreased by 20.9% to 0.87 million bags in January 2023 from 1.1 million bags in January 2022, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 19.4% in January 2023. As a result of the sharp downturn, exports of the Colombian Milds from October 2022 to January 2023 were down by 15.9%, at 3.68 million bags, as compared with 4.37 million bags in the first four months of coffee year 2021/22.

Green bean exports of the Robustas amounted to 3.45 million bags in January 2023, as compared with 3.84 million bags in January 2022, down 10.1%, bookending the growth rates of the first four months of the current coffee year, which had opened with a 6.8% downturn, followed by two consecutive months of positive growth. As a result, the shipments in the first four months of coffee year 2022/23 were down 1.4% to 13.97 million bags from 14.18 million bags in the same period in coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In January 2023, South America’s exports of all forms of coffee decreased by 19.9% to 3.93 million bags, driven by the three main origins of the region, Brazil, Colombia and Peru, which saw their combined exports fall by 20.9%. The two major origins of the region, Brazil and Colombia, saw their respective shipments of coffee decrease by 16.0% and 18.8% in January 2023, falling to 2.86 million bags and 0.85 million bags, respectively, from 3.4 million bags and 1.05 million bags in January 2022. Peru is continuing to see its exports fall by a significantly greater rate, plunging by 63.9% in January 2023, which follows 41.5% downturns in November and December 2022. For Colombia, the sharp downturns continue to be linked to local production conditions, which have been hampered by persistent bad weather linked to the La Niña phenomenon.

In January 2023, Colombia’s production recorded zero growth, following four consecutive months of negative growth, leading the total coffee output for the twelve months to January 2023 to decrease by 10% to 11.08 million bags from 12.36 million bags in the same period a year ago. In Peru, the negative impact of the weather on the origin’s exports has already been addressed in recent issues of the CMR, with social unrest in the country being an additional causal component introduced in the January 2023 issue. However, the size of the plunge in export volume in January 2023 is technical and reflects the anomalous export volume observed in January 2022, in which 435,961 bags of coffee were shipped, the largest export volume for the month of January on record and 53% greater than the second-largest. The average export volume over the past six years, 2016–2021, is 195,565 bags; measured against this, the January 2023 exports are down 19.5%, which is more in line with the region and Brazil and Colombia’s performances.

Exports of all forms of coffee from Asia and Oceania decreased by 17.2% to 3.45 million bags in January 2023 and were down 3.3% to 14.42 million bags in the first four months of coffee year 2022/23. The region’s top three origins are the main drivers for the latest downturn, with the exports of Vietnam down 12.7% to 2.45 million bags from 2.8 million bags in January 2022. Likewise, India and Indonesia’s exports declined by 39.7% to 0.34 million bags from 0.56 million bags and 18.8% to 0.58 million bags from 0.72 million bags in January 2022, respectively.

The New Year and Lunar New Year holidays coincided in January 2023, a rare event, leading to a shortfall of business days, thus explaining the decrease in exports from Indonesia and Vietnam.

Exports of all forms of coffee from Africa increased by 19.5% to 1.11 million bags in January 2023 from 0.93 million bags in January 2022. For the first four months of the current coffee year, exports totalled 4.22 million bags as compared with 4.15 million bags in coffee year 2021/22, up 1.4%. Uganda is the main driver behind the jump in the region’s exports, with coffee shipments from the region’s largest producer and exporter increasing by 22.9% to 0.49 million bags, as compared with 0.4 million bags in January 2022. Significantly, it ended 12 consecutive months of decreasing exports, which had led the origin’s cumulative total exports over the past year (January–December 2022) to fall to 5.63 million bags as compared with 6.77 million bags between January and December 2021, down 16.9% or 1.14 million bags.

Drought in most of the coffee growing regions has led to a lower and shorter main harvest season in central and eastern parts of Uganda and hence lower output; however, exports are up in January 2023 because of a stocks drawdown on the back of rising prices for Robustas which in turn were responding to the reduced global supply, especially from Indonesia and Vietnam. Côte d’Ivoire and Tanzania are two other origins of note for January 2023, with their exports up 105.8% and 17.8%, respectively.

In January 2023, exports of all forms of coffee from Mexico and Central America were down 5.0% to 1.21 million bags as compared with 1.27 million in January 2022. For the first four months of the current coffee year, exports are also down 11.4%, totalling 2.75 million bags as compared with 3.1 million bags in October–January 2021/22. As mentioned previously, the region’s latest decline, the fourth in a row since the start of coffee year 2022/23, was due to a confluence of downturns in El Salvador (-58.3%), Guatemala (-40.9%) and Nicaragua (-22.5%) against upturns in Honduras (+2.8%) and Mexico (+61.4%), with the negative growth of the former group overwhelming the gains of the latter. The 2.8% increase for Honduras is the first uptick since January 2022, and reflects the fact that the origin finds itself deep in its harvesting season with a build-up of sufficient supply to meet its contractual obligations.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 3.0% in January 2023 to 0.95 million bags from 0.98 million bags in January 2022. In the first four months of coffee year 2022/23, a total of 3.75 million bags of soluble coffee were exported, representing a decrease of 11.2% from the 4.22 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee was 10.1% (measured on a moving 12-month average) in January 2023, as in January 2022. Brazil is the largest exporter of soluble coffee and shipped 0.34 million bags in January 2023.

Exports of roasted beans were down 9.2% in January 2023 to 61,683 bags, as compared with 67,918 bags in January 2022. The cumulative total for coffee year 2022/23 to January 2023 was 278,977 bags, as compared with 289,578 bags in the same period a year ago.

Production and Consumption
The latest provisional estimate for total production in coffee year 2021/22 remains unchanged at 167.2 million bags, a 2.1% decrease as compared to 170.83 million bags in the previous coffee year.
World coffee consumption is projected to grow by 3.3% to 170.3 million 60-kg bags in 2021/22 as compared to 164.9 million for coffee year 2020/21. In 2021/22, consumption is estimated to exceed production by 3.1 million bags.

The ICO will be publishing shortly new consolidated revised values for production and consumption for 2021/22.

For the full report, visit: icocoffee.org.

The post ICO reports reduced exports for current coffee year drove up prices in February appeared first on Tea & Coffee Trade Journal.

The I-CIP lost 0.1% from December 2022 to January 2023, averaging 156.95 US cents/lb for the latter, whilst posting a median value of 155.54 US cents/lb. In January 2023, the I-CIP fluctuated between a minimum and maximum of 145.54 and 174.95 US cents/lb, whilst opening the month at 157.31 and ending January on 174.95 US cents/lb.

Average prices for all group indicators remained stable, with a slight decrease in January 2023. The Colombian Milds and Other Milds decreased by 2.3% and 1.7%, to 218.91 and 206.76 US cents/lb respectively, in January 2023. However, the Brazilian Naturals and the Robustas gained 0.6% and 2.4%, reaching an average of 170.03 and 95.98 US cents/lb. The London Futures market grew 2.2% whilst ICE’s New York market shrank by 3.9%.

Across the board, price differentials shrank, with the Colombian Milds-Other Milds and Colombian Milds-Brazilian Naturals differentials leading the way by shrinking 12.5% and 11.3% to 12.15 and 48.88 US cents/lb, respectively. The Other Milds-Brazilian Naturals differential also lost 10.9%, averaging 110.78 US cents/lb for the month of January 2023. Presenting more moderate losses, the Colombian Milds-Robustas and Other Milds-Robustas differentials declined by 5.7% and 4.9%, closing the month at 122.93 and 100.78 US cents/lb. The Brazilian Naturals-Robustas differential also presented a moderate loss of 1.6% from December 2022 to January 2023, reaching 74.05 US cents/lb.

The arbitrage, as measured between the New York and London Futures market lost 10.1%, closing in at 73.97 US cents/lb in January 2023, from 82.26 US cents/lb in December 2022.

Intra-day volatility of the I-CIP decreased 0.5 percentage points between December 2022 and January 2023, reaching 8.6%. Robustas and the London Futures market were the least volatile amongst all group indicators, at 6.0% and 6.8%, respectively, in January 2023. The Brazilian Naturals’ volatility was the highest amongst the group indicators, averaging 12.7%, a 0.6 percentage point increase from the previous month. The variation in volatility of the Colombian Milds and Other Milds for December 2022 to January 2023 is -2.4 to 9.2% and -0.8 to 8.9%, respectively. The variation of the New York Futures market’s volatility contracted 0.2 percentage points, averaging 12.3% for the month of January 2023.

The New York certified stocks increased by 4.3% from the previous month, closing in at 0.91 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.04 million 60-kg bags, representing a decrease of 3.8%.

Exports by Coffee Groups – Green Beans
Global green bean exports in December 2022 totalled 9.81 million bags, as compared with 10.64 million bags in the same month of the previous year, down 7.7%. The downturn was spread across all coffee groups except for the Robustas, which recorded a marginal gain of 1.1%. As a result, the cumulative total exports of green beans for coffee year 2022/23 are down 1.1% as compared with 2.4% increase for the first two months of the current coffee year. The cumulative total for 2022/23 to December is 27.26 million bags as compared with 27.67 million bags over the same a year ago, down 1.5%.

Shipments of the Other Milds decreased by 24.8% in December 2022 to 1.24 million bags from 1.65 million bags in the same period last year. This is the third consecutive month of negative growth for green bean exports of the Other Milds since the start of the new coffee year. As a result, the cumulative volume of exports fell by 17.8% in the first three months of coffee year 2022/23 to 3.54 million bags from 4.3 million bags over the same period in coffee year 2021/22. The latest downturn is primarily driven by Honduras and Peru, down 33.7% and 41.4%, respectively in December 2022 as compared with December 2021.

Green bean exports of the Brazilian Naturals also declined in December 2022, falling by 10.3% to 3.24 million bags, following a 15.2% increase in November 2022. For the first three months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 10.32 million bags, up 5.8% from 9.76 million bags over the same period a year ago. Not surprisingly, the shifting fortunes of the Brazilian Naturals reflected the changes in Brazil’s green bean exports, the biggest producer and exporter of the group, which also fell in December 2022 (down 14%) as compared with November 2022 (up 15.5%).

Green bean exports of the Colombian Milds decreased by 7.5% to 1.08 million bags in December 2022 from 1.18 million bags in December 2021, driven primarily by Colombia, the main origin of this group of coffee, whose exports of green beans were down 11.8% in December 2022. As a result of the sharp downturn, exports of the Colombian Milds from October to December 2022 were down by 12.7%, at 2.85 million bags, as compared with 3.27 million bags in the first three months of coffee year 2021/22.

Green bean exports of Robustas amounted to 4.25 million bags in December 2022, as compared with 4.21 million bags in December 2021, up 1.1%, continuing to build on the 2.6% increase in November 2022. The two consecutive months of positive growth meant that shipments in the first three months of coffee year 2022/23 were up 2.0% to 10.55 million bags from 10.34 million bags in the same period in coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In December 2022, South America’s exports of all forms of coffee decreased by 17.3% to 4.64 million bags. The two major origins of the region, Brazil and Colombia, saw their respective shipments of coffee fall by 15.2% and 11.0% in December 2022, falling to 3.21 million bags and 1.05 million bags, respectively, from 3.79 million bags and 1.18 million bags in December 2021. Ecuador and Peru, however, saw their volume of exports fall by nearly half, plunging by 45.2% and 41.5%, respectively. For Colombia, the sharp downturns continue to be linked to local production conditions. Persistent bad weather linked to the La Niña phenomenon caused Colombia’s December 2022 coffee output to drop by 29%, the country’s fourth consecutive month of negative growth, with a consequent impact on exports.

In Peru, weather-driven elongation of the current harvesting period and intermittent rains hampering the drying process, both of which negatively affect the quality of dried beans, have been affecting the supply of coffee beans since the beginning of the 2022/23 season. However, since the beginning of the last month of 2022, social unrest in the country may have added to supply problems, leading to December 2022 having the lowest volume of exports since 2015, when only 310,000 bags were shipped from Peru. As for Ecuador, the sharp fall in December 2022 can be attributed to the previous anomalous growth in December 2021, when the export volume of all forms of coffee increased by 164.4%. The 57,599 bags of coffee exported in December 2022 is in line with the current trend and previous volumes for the month, averaging 57,508 bags in 2016–2020.

Exports of all forms of coffee from Asia and Oceania increased by 4.2% to 4.59 million bags in December 2022 and were up 2.0% to 6.57 million bags in the first three months of coffee year 2022/23. The region’s increase is explained by Vietnam (up 16.4%), the largest producer and exporter of coffee from Asia and Oceania, which shipped 3.38 million bags in December 2022. However, the region’s relatively small increase was due to the 39.0% decrease in exports of the region’s third-largest exporter, India, which shipped only 0.42 million bags as compared with 0.68 million bags in December 2021. It was also the fifth consecutive month of negative growth for the origin’s exports. The downturn is to be expected, however, as coffee year 2021/22 was a record-breaking year for India, with the origin shipping 7.24 million bags as compared with 5.95 million bags in coffee year 2020/21.

Exports of all forms of coffee from Africa decreased by 9.0% to 0.97 million bags in December 2022 from 1.13 million bags in December 2021. For the first three months of the current coffee year, exports totalled 3.17 million bags as compared with 3.22 million bags in coffee year 2021/22, down 1.4%. Uganda is the main driver behind the fall in the region’s exports, with shipments of coffee from the region’s largest producer and exporter falling by 21.9% to 0.42 million bags as compared with 0.54 million bags in December 2021.

This is now the 12th consecutive month of decline for Uganda, with its cumulative total exports from January to December 2022 having amounted to 5.63 million bags, as compared with 6.77 million bags over the same period a year ago (January–December 2021), equating to a 20.25% or 1.14 million bag decrease. Drought in most of the coffee growing regions, leading to a lower and shorter main harvest season in central and eastern parts of Uganda and hence lower output, is continuing to hamper Ugandan coffee exports. As noted previously, Africa’s export performance is not entirely hindered by Uganda, with Côte d’Ivoire (up 69.4% to 0.19 million bags), Kenya (up 33.2% to 0.12 million bags) and Tanzania (up 18.6% to 0.34 million bags), giving the region tremendous uplifts in the first three months of coffee year 2022/23.

In December 2022, exports of all forms of coffee from Mexico and Central America were down 15.2% to 0.69 million bags, as compared with 0.81 million in December 2021. For the first three months of the current coffee year, exports were also down 15.2%, totalling 1.55 million bags as compared with 1.83 million bags in October–December 2021/22. The region’s latest decline, the third consecutive month since the start of coffee year 2022/23, is mainly a reflection of Honduras, the largest exporter and producer of the region, with a 33.7% decrease (99,918 bags) in exports in December 2022. Two reasons explain the latest fall for Honduras: (i) continuing struggles with leaf-rust, or roya, affecting the origin’s harvests for coffee year 2022/23; and (ii) a technical downturn reflecting a 46.3% increase in December 2021. Costa Rica, Guatemala and Nicaragua were the region’s other major origins making negative contributions to Mexico and Central America’s exports in December 2022, decreasing by 23.3% (31,848 bags), 20.7% (87,100 bags) and 35.1% (103,290 bags), respectively.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 15.9% in December 2022 to 0.98 million bags from 1.17 million bags in December 2021. In the first three months of coffee year 2022/23, a total of 2.8 million bags of soluble coffee were exported, representing a decrease of 13.6% from the 3.25 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee was 9.0% (measured on a moving 12-month average) in December 2022, down from 9.1% in December 2021.

Brazil is the largest exporter of soluble coffee, shipping 0.34 million bags in December 2022, followed by India with 0.22. Exports of roasted beans were up 4.7% in December 2022 to 75,852 bags, as compared with 72,446 bags in December 2021. The cumulative total for coffee year 2022/23 to December 2022 was 208,975 bags, as compared with 221,554 bags in the same period a year ago, down 5.7%.

Production and Consumption
The latest provisional estimate for total production in coffee year 2021/22 remains unchanged at 167.2 million bags, a 2.1% decrease as compared to 170.83 million bags in the previous coffee year. World coffee consumption is projected to grow by 3.3% to 170.3 million 60-kg bags in 2021/22 as compared to 164.9 million for coffee year 2020/21. In 2021/22, consumption is estimated to exceed production by 3.1 million bags. The ICO will be publishing shortly new consolidated revised values for production and consumption for 2021/22.

For more information or the full report, visit the ICO’s new website: icocoffee.org.

The post Coffee prices stabilised in January, with a slight decrease appeared first on Tea & Coffee Trade Journal.

The ICO Composite Indicator Price (I-CIP) gained 0.3% from November to December 2022, averaging 157.19 US cents/lb for the latter, whilst posting a median value of 157.73 US cents/lb. In December 2022, the I-CIP fluctuated between 151.95 and 162.31 US cents/lb.

Average prices for all group indicators remained stable, with a slight increase in December 2022. The Colombian Milds, Brazilian Naturals and Robustas increased by 0.4%, 1.5% and 1.3%, respectively, month on month in December 2022. The group indicators respectively averaged 224.12, 169.00 and 93.76 US cents/lb in December. The Other Milds fell by 1.7% to 210.24 US cents/lb. Stability in the market is in part due to the average of the 2nd and 3rd positions of the ICE New York and London futures market remaining stable.

The Colombian Milds-Other Milds differential sprung back up 48.2% to 13.88 US cents/lb. The Colombian Milds-Brazilian Naturals and Other Milds-Brazilian Naturals both declined by 2.8% and 12.8% to 55.12 and 41.24 US cents/lb in December 2022, respectively. The Colombian Milds Robustas differential remained stable, losing only 0.2 percentage points and reaching 130.36 US cents/lb for the last month of 2022. Falling 3.9% over the course of the month was the Other Milds-Robustas differential, retracting 3.9%, to 116.48 US cents/lb. The Brazilian Naturals-Robustas differential gained 1.8% from November to December 2022, reaching 75.24 US cents/lb. The arbitrage between the New York and London Futures gained 0.2%, closing in at 82.26 US cents/lb in December 2022, up from 82.13 US cents/lb in November 2022.

Intra-day volatility of the I-CIP decreased 0.2 percentage points between November and December 2022, reaching 9.1%. Robustas and the London futures market were the least volatile amongst all group indicators, at 5.3% and 4.8%, respectively, in December 2022. The Brazilian Naturals’ volatility was the highest amongst the group indicators, averaging 12.1%, a 0.2 percentage point increase from the previous month. The variation in volatility of the Colombian Milds and Other Milds for November to December 2022 is 0.6 to 11.6% and 0.1 to 9.7%, respectively. The New York futures market remained the most volatile, averaging 12.5% for the month of December 2022.

The New York certified stocks increased by 46.6% from the previous month, closing in at 0.87 million 60-kg bags, whilst certified stocks of Robusta coffee reached 1.08 million 60-kg bags, representing a decrease of 25.5%.

Exports by Coffee Groups – Green Beans
Global green bean exports in November 2022 totalled 9.21 million bags, as compared with 8.31 million bags in the same month of the previous year, up 10.8%. The positive growth was driven by the Brazilian Naturals and Robustas, which saw their exports increase by double digits, while the Colombian and Other Milds suffered from double-digit decreases. As a result, the cumulative total exports of green beans for coffee year 2022/23 bounced back into black, up 3.5% as compared with the 3.5% decrease for the first month of the current coffee year. The cumulative total for 2022/23 to November is 17.63 million bags as compared with 17.03 million bags over the same period a year ago.

Green bean exports of the Brazilian Naturals bounced back sharply in November 2022, rocketing up by 34.5% to 3.67 million bags, following a lackluster 0.5% increase in October 2022 as compared with the same periods in the previous coffee year. For the first two months of coffee year 2022/23, green bean exports of the Brazilian Naturals amounted to 7.11 million bags, up 15.6% from 6.15 million bags over the same period a year ago. Not surprisingly, the shifting fortunes of the Brazilian Naturals reflected the changes in Brazil’s green bean exports, the biggest producer and exporter of the Brazilian Naturals, which also bounced back in November 2022 (up 32%) as compared with October 2022 (up 1.9%).

Green bean exports of Robustas amounted to 3.58 million bags in November 2022, as compared with 3.17 million bags in November 2021, up 12.9%, a sharp turnaround from the 5.5% decrease in October 2022. This meant that the shipments in the first two months of coffee year 2022/23 were up 4% to 6.38 million bags versus 6.13 million bags in the same period in coffee year 2021/22

Shipments of the Other Milds decreased by 15.1% in November 2022 to 1.1 million bags from 1.29 million bags in the same period last year. This is the second consecutive month of negative growth for green bean exports of the Other Milds since the start of the new coffee year, having already fallen by 7.1% in October 2022. As a result, the cumulative volume of exports fell by 11% in the first two months of coffee year 2022/23 to 2.36 million bags from 2.65 million bags over the same period in coffee year 2021/22.

Exports of the Colombian Milds decreased by 22.8% to 0.86 million bags in November 2022 from 1.12 million bags in November 2021, driven primarily by Colombia, the main origin of this coffee group, whose green bean exports were down 26.7% in November 2022. As a result of the sharp downturn, exports of the Colombian Milds from October to November 2022 were down by 15.2%, at 1.78 million bags, as compared with 2.1 million bags in the first two months of coffee year 2021/22.

Exports by Regions – All Forms of Coffee
In November 2022, South America’s exports of all forms of coffee increased by 4.7% to 4.96 million bags. There were wide variations in the performances of November 2022 exports among the major origins of the region, with Brazil (up 25.4%) being the best performing, and Peru (down 41.5%) and Colombia (down 24.2%) the worst performing. Improved shipping conditions have been reported as the reason behind the strong increase in Brazil’s exports, but for Peru and Colombia the sharp downturns are linked to local production conditions. Persistent bad weather linked to the La Niña phenomenon has caused Colombia’s November 2022 coffee output to drop by 6%, the country’s third consecutive month of negative growth, with a consequent impact on exports. In Peru, irregular weather patterns have led to prolonged and intermittent rains, which impacted the regular development of cherries and flowers, leading to coffee trees having both cherries and flowers concurrently and thus spreading out the harvesting period. Moreover, intermittent rains also hampered the drying process, having a negative impact on the quality of dried beans. These all affected the supply of coffee beans and contributed to November 2022 having the lowest volume of exports since 2007, when only 244,325 bags were shipped from Peru.

Exports of all forms of coffee from Asia and Oceania increased by 19% to 3.78 million bags in November 2022 and were up 3.6% to 6.57 million bags in the first two months of coffee year 2022/23. The region’s sharp increase is explained by Vietnam (up 19.8%) and Indonesia (up 48.7%), the largest and the second-largest producers and exporters of coffee from Asia and Oceania, shipping 2.2 million bags and 0.89 million bags, respectively. However, the region’s third-largest exporter, India, saw its exports decrease in November 2022, down 0.8% to 0.58 million bags from 0.59 million bags in November 2021.

Exports of all forms of coffee from Africa increased by 6.8% to 1.09 million bags in November 2022 from 1.02 million bags in November 2021. For the first two months of the current coffee year, exports totalled 2.16 million bags as compared with 2.15 million bags in coffee year 2021/22. In November 2022, Uganda’s exports fell for the 11th consecutive month, decreasing by 14.8% to 0.45 million bags from 0.52 million bags in November 2022. Uganda’s cumulative total exports over the past 11 months (January–November 2022) amount to 5.21 million bags as compared with 6.23 million bags over the same period a year ago (January–November 2021), down 16.4% or 1.02 million bags. Drought in most of the coffee growing regions, leading to a lower and shorter main harvest season in central and eastern parts of Uganda and hence lower output, is continuing to hamper Ugandan coffee exports. Despite Uganda’s large negative push downwards on Africa’s coffee exports in November 2022, positive pulls upwards by Côte d’Ivoire (up 111.1%) and Ethiopia (up 29.2%), the region’s third- and second-largest producers and exporters, supported by Kenya (up 16.6%) and Rwanda (up 63.6%), were sufficiently robust to ensure that the region’s exports grew in November 2022, despite the downturn in Uganda’s exports.

In November 2022, exports of all forms of coffee from Mexico and Central America were down 7.1% to 0.41 million bags as compared with 0.45 million in November 2021. For the first two months of the current coffee year, exports are down 13.3%, totalling 0.89 million bags as compared with 1.02 million bags in October–November 2021/22. The region’s decline in November was due to Honduras, down 50%, which is struggling with leaf-rust, or roya, which has hit the industry’s harvests.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 3.2% in November 2022 to 0.97 million bags from 1.0 million bags in November 2021. In the first two months of coffee year 2022/23, a total of 1.81 million bags of soluble coffee were exported, representing a decrease of 12.9% from the 2.07 million bags exported in the same period during the previous coffee year. Soluble coffee’s share in the total exports of all forms of coffee was 9.0% (measured on a moving 12-month average) in November 2022, down from 9.1% in November 2021. Brazil is the largest exporter of soluble coffee, shipping 0.27 million bags in November 2022, followed by India with 0.19 million bags and Indonesia with 0.15 million bags exported over the same period.

Exports of roasted beans were down 7.5% in November 2022 to 68,865 bags, as compared with 74,411 bags in November 2021. The cumulative total for coffee year 2022/23 to November 2022 was 130,953 bags, as compared with 149,108 bags in same period a year ago.

Production and Consumption
The latest provisional estimate for total production in coffee year 2021/22 remains unchanged at 167.2 million bags, a 2.1% decrease as compared to 170.83 million bags in the previous coffee year.

World coffee consumption is projected to grow by 3.3% to 170.3 million 60-kg bags in 2021/22 as compared to 164.9 million for coffee year 2020/21. In 2021/22, consumption is estimated to exceed production by 3.1 million bags.

For the full report, visit: ico.org.

The post Coffee prices end 2022 on a stable note appeared first on Tea & Coffee Trade Journal.

Average prices for all group indicators decreased in November 2022. The Colombian Milds and Other Milds, decreased by 14.8% and 10.9%, respectively, month on month in November. The former averaged 223.22 US cents/lb in November 2022, whilst the latter averaged 213.85 US cents/lb. The Brazilian Naturals fell by 13.4% to 166.54 US cents/lb. The Robustas fell below the 100 US cents/lb mark, averaging 92.59 US cents/lb for the month of November, a 10.1% decline from the previous month. The downturns are in part due to the average 2nd and 3rd positions of the ICE New York futures market, which lost 14.0% in November 2022 over October 2022. The average of the 2nd and 3rd positions of the ICE Futures Europe for the Robustas also shrank by 10.3%. The Colombian Milds-Other Milds differential suffered a month-on-month loss of 57.2%, closing in at 9.37 US cents/lb for November 2022.

The Colombian Milds-Brazilian Naturals and Colombian Milds-Robustas differentials declined by 18.7% and 17.8% to 56.68 and 130.63 US cents/lb in November 2022, respectively. Falling the least was the Other Milds Brazilian Naturals differential, declining by only 1.0%, to 47.31 US cents/lb. The Other Milds Robustas differential lost 11.5% from October to November 2022 reaching 121.26 US cents/lb. The Brazilian Naturals-Robusta differential retracted 17.2% to 73.95 US cents/lb for the aforementioned period.

The arbitrage between the New York and London Futures markets shrunk by 17.5%, falling to 82.13 US Cents/lb in November 2022 from 99.56 US cents/lb in October 2022 precipitated by the faster rate of price decline of Arabica compared with Robusta.

Intra-day volatility of the I-CIP increased 2.2 percentage points between October and November 2022, reaching 9.3%. Robustas and the London futures market were the least volatile amongst all group indicators, at 7.2% and 7.1%, respectively, in November 2022. The Brazilian Naturals’ volatility was the highest amongst the group indicators, averaging 11.9%, a 2.3 percentage point increase from the previous month. The variation in volatility of the Colombian Milds and Other Milds for October to November 2022 is 3.6 to 11.0% and 2.0 to 9.6%, respectively. The New York futures market remained the most volatile, posting an increase of 2.7 percentage points, averaging 12.5% for the month of November 2022.

The New York certified stocks increased by 45.3% from the previous month, closing in at 0.59 million bags, whilst certified stocks of Robusta coffee reached 1.45 million bags, representing a decrease of 4.6%.

Exports by Coffee Groups – Green Beans
Global exports of green beans in October 2022 totalled 8.5 million bags, compared with 8.72 million bags in the same month of the previous year, down 2.5%. The downturn was spread across most of the coffee groups, with the Brazilian Naturals alone starting the new coffee year on a positive footing with an uptick of 0.5%, the third consecutive months of positive growth, exporting 3.44 million bags of green beans.

The positive start to the new coffee year made by the Brazilian Naturals was driven by Brazil, the biggest producer and exporter of the Brazilian Naturals, with a 1.9% increase in the exports of green beans, outweighing the downturns of the other major origins of the Brazilian Naturals group – Ethiopia (-10.9%), Uganda (-6.0%) and Vietnam (-19.5%).

Exports of the Colombian Milds decreased by 4.1% to 0.94 million bags in October 2022 from 0.98 million bags in October 2021, driven by the contractions in Colombia and Tanzania whose exports of green beans were down 6.0% and 2.3%, respectively. Within this coffee group, Kenya alone started the new coffee year on a bright note, exporting an additional 46.2% of green beans in October 2022 as compared with October 2021. The decline in October 2022 is the fourth in a row for Colombia, and another month in which production is at fault for the decreasing exports – in October 2022 Colombia’s coffee output fell by 12%. The Colombian Coffee Growers Federation (FNC) attributed the decline in production to excess rains due to the La Niña event, which translated into excess water, less sunlight, and fewer blooms in coffee plantations.

Shipments of the Other Milds decreased by 4.3% in October 2022 to 1.3 million bags from 1.36 million bags in the same period last year. Guatemala (-28.0%), Honduras (-49.2%) and Peru (-8.4%) were behind this fall. In Honduras, the coffee industry continues to struggle with leaf rust, which is affecting production, while Guatemala’s output is being hampered due to climatic reasons and the availability of labour, all of which are having a knock-on effect on the countries’ exports.

Of the four coffee groups, the Robustas have recorded the worst performance in the new coffee year 2022/23, with exports falling by 4.8% to 2.82 million bags from 2.96 million bags. Except for India and Indonesia, all major origins within the Robustas group saw their exports of green beans fall in October 2022 – Uganda (-6.0%) and Vietnam (-19.5%). Uganda is still facing drought in most of its coffee-growing regions, which has led and is continuing to lead to lower outputs and, subsequently, lower exports.

Exports by Regions – All Forms of Coffee
In October 2022, South America’s exports of all forms of coffee decreased marginally by 0.2% to 4.99 million bags. The marginality of the growth rate was largely the result of increases in the exports of Brazil (1.1%) and Ecuador (48.3%), edged by the decreases in exports of Colombia (-2.3%) and Peru (-9.4%).

Exports of all forms of coffee from Asia and Oceania totalled 3.17 million bags in October 2022, 10,000 bags greater than in October 2021. The region’s miniscule growth rate, however, belies the strong growth rates amongst the major origins; India and Indonesia made gains of 15.1% to 0.54 million bags and 34.5% to 1.12 million bags, respectively, while Vietnam suffered a 19.5% fall to 1.37 million bags.

Exports of all forms of coffee from Africa decreased by 2.4% to 1.1 million bags in October 2022 from 1.13 million bags in October 2021. Ethiopia and Uganda were the two main origins behind the region’s downturn in exports in October 2022, with the respective growth rates of shipped coffee at -10.9% and -6.0%. The fact that Africa’s decrease of exports was softer than as suggested by the growth rates of the region’s top two biggest exporters is down to the counterweights of Burundi (316.7%), Côte d’Ivoire (83.2%) and Kenya (46.3%). However, the greater-than-normal growth rates of the three origins do not reflect fundamental changes to the respective domestic coffee industries but are technical anomalies due to large negative growth rates in October 2021. Burundi’s exports of all forms of coffee were down 66.5% and Côte d’Ivoire and Kenya by 79.1% and 54.1%, respectively.

In October 2022, exports of all forms of coffee from Mexico and Central America were down 14.6% to 0.49 million bags as compared with 0.57 million in October 2021. Of the 12 origins in the region only the Dominican Republic (10.5%), Mexico (1.1%) Nicaragua (24.6%) and Trinidad & Tobago (259.2%) saw exports increase in October 2022. Honduras exports fell by 49.2% in October 2022, with the volume of all forms of coffee shipped decreasing to 40,842 bags as compared with 80,328 bags. The origin continues to suffer from the impact of leaf-rust which affected the output of coffee year 2021/22 and is now having an adverse effect in the supply available for export. Of the region’s major origins (million bags and over), Costa Rica suffered the steepest fall, with its exports falling by 68.9% in October 2022 to 9,216 bags, as compared with 13,052 bags in the same period a year ago. The volume shipped in October 2022 is the lowest since September 1976, when 7,093 bags were exported. Costa Rica’s coffee institute, ICAFE, cites lower-than-expected production in coffee year 2021/22 as the reason for the drop in exports.

Exports of Coffee by Forms
Total exports of soluble coffee increased by 10.9% in October 2022 to 1.19 million bags from 1.07 million bags in October 2021. The share of soluble coffee in the total exports of all forms of coffee was 9.5% (measured on a moving 12-month average) in October 2022 as compared with 8.9% in October 2021. Brazil is the largest exporter of soluble coffee, and the country shipped 291,345 bags in October 2022, down 6.2% from 310,731 bags in October 2021. The second and third placed origins, India and Indonesia, however started the new coffee year at a gallop, with their soluble coffee exports up 25.0% and 33.7%, at 180,000 bags and 397,805 bags, respectively, in October 2022.

Exports of roasted beans decreased by 18.0% in October 2022 to 61,226 bags from 74,697 bags in October 2021.

Production and Consumption
The latest provisional outlook for total production in coffee year 2022/23 remains unchanged at 167.2 million bags, a 2.1% decrease as compared to 170.83 million bags in the previous coffee year.

World coffee consumption is projected to grow by 3.3% to 170.3 million 60-kg bags in 2022/23 as compared to 164.9 million for coffee year 2020/21. In 2022/23, consumption is expected to exceed production by 3.1 million bags.

For the full report, visit: ico.org.

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The I-CIP lost 10.6% from September to October 2022, averaging 178.54 US cents/lb for the latter, whilst posting a median value of 177.22 US cents/lb. In October 2022, the I-CIP fluctuated in between 159.30 and 194.92 US cents/lb.

Average prices for all groups indicators decreased in October 2022. The Colombian Milds and Other Milds, decreased by 10.9% and 10.2%, respectively, month-on-month in October. The former averaged 261.95 US cents/lb in October 2022, whilst the latter averaged 240.08 US cents/lb. The Brazilian Naturals declined the most within all four groups, falling 12.4% to 192.27 US cents/lb. The Robustas averaged 103.01 US cents/lb for the month of October, a 7.5% decline from the previous month. The downturns are in part due to the average second and third positions of the ICE New York futures market, which lost 12.1% in October 2022 versus September 2022. The average of the second and third positions of the ICE Futures Europe for the Robustas also shrank by 8.3%.

The Colombian Milds-Other Milds and the Brazilian Naturals-Robusta differential both took the hardest hit from September to October 2022, retracting 17.8% and 17.5%. The differential for the aforementioned period shrank from 26.60 to 21.87 US cents/lb and 108.23 to 89.25 US cents/lb. The Colombian Milds-Brazilian Naturals differential declined by 6.5% to 69.68 US cents/lb in October 2022. The Colombian Milds-Robustas differential shrank by 13.0% to 158.94 US cents/lb. The strongest differential amongst all groups is the Other Milds-Brazilian Naturals differential, declining only 0.2%, to 47.82 US cents/lb. Lastly, the Other Milds-Robustas differential lost 12.2% from September to October 2022.

The average monthly differential stood at 137.07 US cents/lb, down from 156.13 in September 2022. The arbitrage between the New York and London Futures markets shrank by 15.4%, falling to 99.56 US Cents/lb in October 2022 from 117.74 US cents/lb in September 2022 as the price decline was more marked for Arabica than Robusta, marking a reversal of the previous trend.

Intra-day volatility of the I-CIP decreased 1.2 percentage points between September and October 2022, reaching a low of 7.1%. Robustas and the London futures market presented the lowest volatility amongst all group indicators, at 5.8% and 5.7%, respectively, in October 2022. The Brazilian Naturals volatility was the highest amongst the group indicators, averaging 9.6%, a 1.3 percentage point decrease from the previous month. The variation in volatility of the Colombian Milds and Other Milds for September to October 2022 is -0.6 to 7.4% and -1.0 to 7.6%, respectively. The New York Futures market remained the most volatile, albeit posting a decrease of 1.4 percentage points, averaging 9.8% for the month of October 2022.

The New York certified stocks decreased 9.3% from the previous month, closing in at 0.41 million bags, whilst certified stocks of Robusta coffee reached 1.52 million bags, representing a decrease of 4.3%.

Export by Coffee Groups
Global exports of green beans were down 1.1% in coffee year 2021/22, totalling 116.07 million bags from 117.32 million bags in coffee year 2020/21. This marks the third largest annual exports in volume on record, with the biggest ever exports having been seen in coffee year 2018/19 when 121.32 million bags of green beans were shipped. Fundamentally, the decrease in green bean exports reflects reduced world coffee production, which is estimated to be down 2.1% to 167.17 million bags for coffee year 2021/22, as compared with an estimated 170.83 million bags in coffee year 2020/21.

The performances of the four groupings were varied in coffee year 2021/22, with the Brazilian Naturals and Colombian Milds down and the Other Milds and Robustas up. The exports of the Brazilian Naturals were down by 4.3% to 37.83 million bags in coffee year 2021/22 from 39.54 million bags in coffee year 2020/21. The downturn was driven by Brazil, the biggest producer and exporter of the Brazilian Naturals, with its total green bean exports decreasing by 12.5% in coffee year 2021/22. An estimated smaller crop harvested during its Arabica ‘off season’ and issues with containers and shipping reported earlier in the coffee year are, in turn, the main reasons behind Brazil’s poor performance.

Exports of the Colombian Milds decreased by 7.1% in coffee year 2021/22, falling to 12.14 million bags from 2022 from 13.07 million bags in the previous coffee year. This is the lowest volume of exports since 2015, when total shipments of green beans totalled 12.78 million bags. The main origin contributing to the overall drop for the group can be traced to Colombia, the biggest producer and exporter of the Colombian Milds, with the country’s exports falling to 10.84 million bags, the lowest level since 2014. The fall in Colombia’s exports is linked to unfavourable weather conditions, reducing the available coffee supply in the country, with the total output estimated to be down 13% in coffee year 2021/22 to 11.68 million bags.

Shipments of the Other Milds increased by 1.3% in coffee year 2021/22, rising to 23.9 million bags from 23.59 million bags in the previous coffee year. The small uptick in the exports of the Other Milds was mainly the result of a confluence of struggles between Honduras and Guatemala, the first and third largest exporters of the Other Milds, and Peru and Nicaragua, the second and fourth largest exporters of the Other Milds which both recorded a stellar performance.

In Honduras, the coffee industry has been struggling with leaf-rust that hit the industry’s harvests, while Guatemala has been dealing with impact of a lower production, due primarily to climatic reasons and availability of labour, which lowered the exports by 7.6% and 20.0%, respectively, to 3.41 million bags and 4.7 million bags. For Nicaragua, coffee year 2021/22 has been a record year, as it shipped 2.87 million bags of green beans, the highest level on record, while for Peru total exports of green beans were 4.58 million bags, the second highest on record, just behind the 4.69 million bags shipped in coffee year 2011/12.

Exports of the Robustas totalled 42.2 million bags in coffee year 2021/22, up 2.6% as compared with 41.12 million bags in coffee year 2020/21. Vietnam and India were the two main positive highlights for coffee year 2021/22 for the Robustas, with the respective exports of green beans increasing by 15.1% and 26.1% to 26.78 million bags and 5.01 million bags. Burundi and Uganda were the two main negative highlights, with their respective exports of green beans decreasing by 62.1% and 10.0% to 134,000 bags and 5.85 million bags.

Export by Regions
In October 2021 to September 2022, South America’s exports of all forms of coffee decreased by 7.1% to 55.31 million bags. Brazil is the reason for the drop in exports, with shipments from the country declining by 11.4% to 38.12 million bags. This is the first time since 2017 that Brazil’s annual exports of all forms of coffee have fallen below the 40 million bags mark. As explained earlier in this report, a smaller crop harvested during its Arabica “off-season” and problems with containers and shipping explain the large drop in exports in Brazil.

Exports of all forms of coffee from Asia and Oceania increased by 12.8% to 43.86 million bags in coffee year 2021/22. Vietnam’s exports increased by 14.8% to 28.19 million bags from 24.56 million bags in coffee year 2020/21, which made the region’s biggest producer and exporter also the single largest absolute contributor to Asia & Oceania’s strong gains in exports in coffee year 2021/22. India’s exports of all forms of coffee jumped 21.7% in coffee year 2021/22, rising to 7.24 million bags from 5.95 million bags in coffee year 2020/21. Indonesia, the third largest producer and exporter of the region, saw its exports of all forms of coffee increase marginally to 6.92 million bags in coffee year 2021/22 from 6.82 million bags in the previous coffee year.

Exports of all forms of coffee from Africa decreased by 5.1% to 13.73 million bags in coffee year 2021/22 from 14.48 million bags in the previous coffee year. As explained earlier within this Report, Burundi and Uganda were the two main contributors to the region’s downturn. Uganda’s decrease in exports is explained by the impact of drought in most of the coffee growing regions, which led to a shorter main harvest season in central and eastern parts of Uganda, and hence lower output and exports. Ethiopia, the second largest producer and exporter of the region, saw its exports of all forms of coffee increase marginally to 4.02 million bags in coffee year 2021/22 from 3.98 million bags in the previous coffee year.

In October 2021 to September 2022, exports of all forms of coffee from Mexico and Central America were down 3.3% to 16.09 million bags as compared with 16.63 million in coffee year 2020/21. Honduras was the single largest contributor to the region’s downturn, with the country’s exports of all forms of coffee down 20.0%, a loss of 1.17 million bags versus the volume shipped in coffee year 2020/21. Costa Rica and Guatemala were the next two biggest contributors, with their absolute decreases recorded at 50,576 bags and 280,445 bags, respectively.

Export by Forms of Coffee
Total exports of soluble coffee increased by 6.1% in coffee year 2021/22 to 12.1 million bags from 11.4 million bags in coffee year 2020/21. The share of soluble coffee of the total exports of all forms of coffee was 9.4% for the year, the highest on record. Brazil was the largest exporter of soluble coffee, shipping 3.89 million bags, followed by India with 2.22 million bags, with Indonesia in third place at 1.66 million bags exported in coffee year 2021/22.

Exports of roasted beans increased by 5.0% in coffee year 2021/22 to 0.82 million bags.

Production and Consumption
The estimated outlook for total production in coffee year 2021/22 remains unchanged at 167.2 million bags, a 2.1% decrease as compared to 170.83 million bags in the previous coffee year.

World coffee consumption was projected to grow by 3.3% to 170.3 million 60-kg bags in 2021/22 as compared to 164.9 million for coffee year 2020/21. In 2021/22, consumption was expected to exceed production by 3.1 million bags.

For the full report, visit: ico.org.

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Costa Rica, one of Central America’s largest Arabica coffee growing countries, has maintained a top-tier coffee-nation status over the years, a position that could well be under siege from diverse emerging trends such as an aging coffee-growing population, recurring coffee diseases, changing coffee pricing dynamics and a muted economic performance exacerbated by the outbreak of the Covid-19 pandemic.

The former Spanish colony, whose coffee roots date back to the 1700s, has recently posted a decline in production by at least 7 per cent during the 2021/2022 marketing year to 1,275,000 60-kg bags, said to be “one of the lowest coffee-producing levels on record and the lowest in 50 years.”

This fall in output has several facets to it including fragile global coffee prices, shrinking coffee plantation acreage and growing unpredictability of the coffee picking labour market particularly because of political and economic upheavals in neighbouring Nicaragua, the biggest supplier of coffee-picking manpower for Costa Rica’s coffee farms.

Nevertheless, the latest industry reviews, including a May 2022 coffee annual report by the United States Department of Agriculture (USDA), predict a more than 7 per cent increase in Costa Rica’s coffee production for the 2022/2023 marketing year to 1,365,000 60-kg bags “as early rains arrived in sufficient volumes to support robust flowering in key growing areas.”

The increase in coffee output could also be boosted by the higher prices noted in the early days of the 2022/2023 coffee growing season, “signaling a strong return to on-farm investments in fertilisation and management practices.”

When the Covid-19 pandemic started to spread globally in the first and second quarter of 2020, the International Coffee Organization (ICO) composite indicator price recorded a decline of 4.1 per cent to an average of $1.0445 USD per pound, particularly in May, reaching a high of $1.0729 on 11 May, and a low of $0.9868 on 29 May. Although the fall in price was partly attributed to uncertainties triggered by the pandemic, the trend was also to do with the larger than expected output from Brazil’s 2020/21 crop.

Actually, by December 2021, the ICO had reported coffee prices reaching “a new multi-year high as the monthly average of the ICO composite indicator price broke through the 200 US cents/lb mark, averaging 203.06 US cents/lb.” This increase was equivalent to 4 per cent compared to 195.17 US cents/lb for the preceding month.

“The price levels during coffee year 2021/22 so far mark a return to the higher levels experienced in 2011,” ICO noted.

In May 2022, ICO reported a rebound of the Composite Indicator Price (I-CIP) of over 200 US cents/lb, the first time since February, hence gaining 4.5 per cent from May to June 2022, averaging 202.46 US cents/lb for June.

Export prices for Costa Rican coffee spiked in CY 2021/2022. Image: Starbucks

To cushion coffee farmers from the vagaries of fluctuating coffee prices, the Costa Rican government has recently developed “infrastructure needed to obtain higher prices for smaller lots of better quality coffee” according to USDA.

Moreover, achieving good prices for smaller lots of coffee has been made possible because of growing popularity of the practice of product differentiation that allows smallholder coffee producers “to capture higher sales prices.”

Anticipating export growth

This surge in global coffee prices could also coincide with an anticipated growth in Costa Rican coffee exports for the 2022/2023 marketing year. The USDA predicts the country’s coffee exports to reach 1,160,000 60-kg bags “the highest level since 2015/2016 as production volume rebounds and high quality Costa Rica coffee remains in demand globally.”

Costa Rica, whose coffee exports has its roots in the mid-1800s when pioneer industry players such as English captain William Le Lacheur Lyon sent hundreds of bags of Costa Rican coffee to Europe, particularly Britain, reported a 25 per cent increase in export price for the coffee sold during the 2021/2022 through April 2022 period to an average of USD $328.9 per bag.

However, the USDA said the price increase may not translate to a boom for Costa Rican coffee producers due to “lower production levels” during the period.

Export price for Costa Rica’s coffee spiked 1.56 per cent and 24.1 per cent from $261.30 to $265.40 and $328.90 between 2019/2020 to 2020/2021 respectively. The driving factors are those that have sustained Costa Rican coffee at the top of global coffee market chart such as high-quality coffee, deployment of environmentally friendly production practices, high level of coffee traceability and transparency, and equity in sharing coffee earnings among players along Costa Rica’s coffee industry value chain.

Young coffee trees growing in Costa Rica. Image: Vanessa L Facenda

Elsewhere, smallholder coffee producers, who are about 45,000 of the 70,000 registered Costa Rican coffee producers, have received sustainability labels such as Fairtrade through their primary cooperatives, translating into higher prices associated with coffee produced by farmers who promote environmental, social and economic sustainability, as well as shade-grown and organic coffee according to ICAFE, the non-profit organisation that oversees and promotes the quality and sustainability of Costa Rican coffee, and which is funded by a 1.5 per cent tax on every pound of coffee exported from Costa Rica.

Fairtrade certification, has in most instances, boosted the bargaining power of the cooperatives in areas such as Santa Elena, Buenavista, Sarapiquí, Tilarán, Montes de Oro, Pilangosta, Llano Bonito, and Coopeldos leading to better coffee prices.

The higher export prices, combining with Costa Rica’s anticipated economic turnaround with growth projections of 3.2 per cent in 2022 and 2.6 per cent in 2023, is likely to spur increased domestic coffee consumption, especially in the 2022/2023 coffee season.

“Domestic demand will strengthen moderately in 2022 and exports will benefit from the reactivation of the tourism sector in the last quarter of 2022 and 2023,” says an economy snapshot on Costa Rica by the Organisation for Economic Co-operation and Development (OECD).

Costa Rica, whose coffee the government says in one report “is prized as some of the world’s best and is shipped everywhere from Austin to Amsterdam,” is likely to post an increase in its domestic coffee consumption projected to reach 420,000 60-kg bags for the 2022/2023 period. The increase is 5 per cent higher than the 400,000 60-kg bags for 2021/2022 season.

Previously, the consumption declined to 196,000 60-kg bags in the 2020/2021 coffee year, excluding imports, the lowest since 1994/1995 with ICAFE, which in 1985 succeeded the 1977-established Costa Rica Coffee Research Centre (CICAFE), attributing the drop to “sharp economic contraction in 2020 and 2021 due to the Covid-19 pandemic.”

The economic contraction was exacerbated by a global recession that was triggered by the pandemic, which damaged the Costa Rican tourism industry, with expectation the recovery would “be protracted, with the economy estimated to grow by 2.6 per cent in 2021, following a strong contraction in 2020” according to the International Monetary Fund (IMF). Furthermore, the USDA report says during the pandemic “restaurants, cafeterias, hotels and other coffee-serving outlets were closed during different periods of time or were required to operate under limited conditions.”

Challenging but optimistic

Moving into the future, Costa Rica’s coffee sector is expected to focus on finding solutions to some glaring challenges that could constrain growth in production, leading to instability in export and domestic consumption levels.

A case in point are the recurring fungal diseases such as coffee leaf rust and anthracnose in coffee-producing provinces such the San José, Alajuela, Puntarenas, Heredia, and Cartago, despite the perfect coffee growing conditions there such as plentiful volcanic soils that are not only acidic but also extremely fertile and have altitudes between 1200m and 1700m.

Shaded coffee plants growing in Costa Rica. Image: Vanessa L Facenda

These conditions have been seen to encourage cooler climates that have in recent times given way to “higher than normal precipitation levels” linked to the damage of the young coffee fruit. “Continued high moisture levels and high temperatures supported the development of fungal diseases,” states the USDA report with the worst affected region being the mountainous Los Santos.

“Although there are more coffee rust-tolerant varieties available, adoption has been slow given the substantial costs involved in renovating plantations, especially among small producers who can least afford to forego income until the new plants begin producing,” the report explains.

Furthermore, there is has been a notable decline in the number of coffee producers due to what USDA says is “long periods of low coffee prices, aging farmers, and high land prices near urban areas.” The report further states that most of the remaining coffee growers – 86 per cent in 2020/2021 marketing year – are small farmers, who produce the equivalent of fewer than 100 bags of coffee each year.

In a related trend, the acreage under plantation coffee production has been shrinking as growers fall further behind the ‘ideal plantation renovation plan’. According to the USDA, the plan requires a plantation coffee farmer to replant 5 per cent of their plantation area annually, hence completely renovating the entire plantation in 20 years.

However, recent strong coffee prices decrease the incentive for farmers to replant, which, the USDA notes, takes area out of production for three years, and farmers have exhibited reluctance to plant new varieties that may have higher rust-resistance or higher yields until they can verify the results on someone else’s land nearby. “These factors, combined with access to credit and available genetic material have contributed to the steady aging of Costa Rica’s plantations, which has already contributed to persistently lower yields,” the report adds.

But the future of Costa Rica’s coffees, with the most classic being mild and softly acidic, looks as bright and promising as ever with some growers said to be currently experimenting with new flavours that are brighter and fruitier according to ICAFE.

The commitments of the Costa Rican government to promote transparency along the coffee industry’s value chain, coupled with state-supported coffee producer incentives, and growing interest in this market by local and international brands are likely to shape the Central America country’s coffee market supply-side and demand trends in the long term.

• Shem Oirere is a freelance business journalist based in Nairobi, Kenya. He has spent more than 25 years covering various sectors of Africa’s economy including the region’s agribusiness. He holds BA in International Relations and Diplomacy from the University of South Africa and earned a higher degree in journalism from the London School of Journalism and is also a member of the Association of Business Executives (ABE).

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