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The Independent Voice of the Commodity Industry
COFFEE MARKET RECOVERS SLIGHTLY FROM DECEMBER SLUMP

COFFEE MARKET RECOVERS SLIGHTLY FROM DECEMBER SLUMP



After reaching its lowest level in 22 months in December 2017, the monthly average of the ICO composite indicator price increased by 1.4 per cent to 115.60 US cents/lb in January 2018.

In its latest report on the market, the International Coffee Organization (ICO) said prices for all group indicators saw gains in January. Colombian Milds, Other Milds, and Brazilian Naturals recorded increases of 1.5, 1 and 1.8 per cent respectively while Robusta rose by 1.2 per cent.

In December 2017, global shipments of coffee increased by 0.7 per cent to 10.62 million bags compared to the same month one year ago. However, shipments for the first quarter of coffee year 2017/18 are down 6.7 per cent from one year ago, reaching 28.36 million bags.

Global output in crop year 2017/18, is estimated at 158.93 million bags, 0.8 per cent higher than last year. Production is estimated to grow by 4.7 per cent to 17.93 million bags in Africa, 5.9 per cent to 47.64 million bags in Asia and  Oceania and 7.1 per cent to 21.92 million bags in Mexico & Central America. These increases would offset declines in South America by 4.9 per cent to 71.44 million bags.

After falling to its lowest level in 22 months in December 2017, the monthly average of the ICO composite indicator price rose by 1.4 per cent in January 2018 to 115.60 US cents/lb. The composite started the month at a high of 118.83 US cents/lb then fell to 113.03 US cents/lb on 16 January before rising slightly at the end of the month.

Robusta briefly touched a level above 90 US cents/lb for the first time since November 2017, before settling on a monthly average of 88.65 cents, 1.2 per cent higher than its level in December 2017.

The average arbitrage in January, as measured on the New York and London futures markets, increased by 3.8 per cent to 48.75 US cents/lb. Additionally, intra-day volatility of the ICO composite indicator price increased by 0.6 percentage points to 5.7 per cent, after five months of decrease.

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