Friday 19 August 2022

Ico Report: coffee indicator price bounced back in May

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LONDON, UK – Coffee prices went on a rollercoaster ride in May: the ICO Composite Indicator Price gained 4.5% over the previous month averaging 202.46 US cents/lb, the highest level since February. The daily average fluctuated between a high of 208.69 cents/lb on June 1st and a low of 193.32 cents/lb of June 28th.

Average prices for all coffee groups indicators of the ICO increased in June 2022. The Brazilian Naturals outperformed all growths by gaining 5.8% from May to June 2022, reaching 230.40 US cents/lb. The Colombian Milds and Other Milds presented a similar positive trend, increasing by 5.3% and 5.1% respectively.

The Colombian Milds averaged 301.57 US cents/lb in June 2022, whilst the Other Milds ICO coffee price indicator averaged 273.69 US cents/lb.

This upwards trend is in part due to the 2nd and 3rd positions of the New York futures market which expanded by 4.9% from May to June 2022, ranging from 218.61 US cents/lb to 229.38 US cents/lb.

The average of the 2nd and 3rd positions of the ICE Futures Europe for Robustas increased by 0.2%, helping to push the Robustas group indicator to 103.81 US cents/lb, up by 0.7% in June 2022.

Intra-day volatility of the ICO Composite Indicator Price increased 0.5 percentage points between May and June 2022, reaching 11.0%.

Global exports of green beans in May 2022 totalled 9.75 million 60-kg bags, compared with 8.8 million bags in the same month of the previous year, up 10.7%.

Total exports of all forms of coffee were up 10% in May 2022, totalling 10.8 million bags, while in the first eight months of coffee year 2021/22 they reached 87.99 million bags, with a consolidated increase of 0.7%

South America’s exports are up 24.5% at 3.92 million bags in May 2022, but are down 9.9% for October–May 2021/22 at 37.92 million bags as compared with 42.1 million bags for the same period last year.

Exports from Asia and Oceania increased by 16.9% to 3.72 million bags in May 2022, and by 19.7% to 31.13 million bags in the first eight months of coffee year 2021/22.

Exports from Africa decreased by 0.9% to 1.29 million bags in May 2022 from 1.3 million bags in May 2021, totalling 8.59 million 60-kg bags from October to May.

In May 2022, exports from Mexico and Central America were down 14.5% to 1.87 million bags versus 2.19 million in May 2021.

Total exports of soluble coffee increased by 3.0% in May 2022 to 0.98 million bags versus 0.95 million bags in May 2021. As a result, the share of soluble coffee within the total exports of all forms of coffee has risen to 10.1% (measured on a moving 12-month average) in May 2022 versus 10.0% in May 2021.

Exports of roasted beans increased by 9.9% in May 2022 to 75,329 bags versus 68,539 bags in May 2021, totalling 0.56 million 60-kg bags from October 2021 to May 2022.

The latest provisional outlook for total production in coffee year 2021/22 remains unchanged at 167.2 million bags, a 2.1% decrease versus 170.83 million bags in the previous coffee year.

World coffee consumption is still 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 expected to exceed production by 3.1 million bags.

However, exogenous factors such as reduced global economic growth and increased cost of inputs, production and trade may affect both supply and demand in the remaining four months of coffee year 2021/22.

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