ICO’s composite indicator shows coffee prices rose 10.4% to 134.78 US cents/lb in May 2021 as key exporting countries expect reduced production for the 2021/22 season
Reduced coffee production by key exporting countries and higher consumer demand as Covid-19 restructions ease globally have contributed to rising coffee prices, the ICO said | Photo credit: Young_n
The International Coffee Organization (ICO) has identified a ‘firm upward trend’ for coffee prices over the first eight months of coffee year 2020/21. A 10.4% increase in prices to 134.78 US cents/lb in May 2021 indicated a ‘net recovery’ from low prices that began in 2017/2018, the trade organisation said.
The ICO said the performance of prices was driven by anticipated reduction production in key exporting countries, such as the world’s largest producer, Brazil, for the 2021/22 season. Production for Mexico & Central America is also expected to decrease, with African output forecast to remain stable.
The ICO also highlighted ‘brighter prospects for demand’ as the Covid-19 lockdown measures are eased across major consuming markets and vaccine programmes generate greater consumer confidence.
Shipments by coffee exporting countries to all destinations totalled 11.4 million 60-kg bags in April 2021, compared with 11.29 million bags in April 2020. As a result, total exports over the first seven months of coffee year 2020/21 amounted to 77.52 million bags compared to 74.49 million bags over the same period in coffee year 2019/20, the ICO reported.
Global coffee prices have been persistently depressed in the last few years, with many roasters and retailers calling for greater action to improve farmer profitability
. In November 2016, the global commodity price (c-price) for arabica coffee fell below Fairtrade’s US$1.40/lb minimum for washed arabica. By August 2018 it had fallen below the US$1/lb. threshold for the first time in more than a decade.
The ICO composite indicator price provides an overall benchmark for the price of green coffee of all major origins and type and is considered to be the best available measure of green coffee transactions on a global basis.