An assessment by the ICO of the coffee market suggests that the price crisis that has seen the C Price fall below US$1 could bottom out, although there is still a long way to go before more sustainable prices are achieved.
Speaking after the 122nd Session of the International Coffee Council in London, during which the Council provided a strong mandate for the ICO to further analyse the factors driving future and spot market prices for coffee, the organization’s Executive Director José Sette, said “ICO analysis suggests that the worst part of the crisis may be approaching its end, but this will depend on the development of the Brazilian Real as a result of the elections in that country; in any case the price crisis must not be neglected.” The Presidential election takes place on 7 October 2018.
Concern was voiced by members, particularly from coffee-producing countries in Africa, Latin and Central America, Asia and the Pacific, about prices being below the threshold of US$1/lb, jeopardizing the livelihood of 25 million coffee farmers.
In a statement after the Council meeting, the ICO said the crisis could force coffee farmers to abandon coffee production, switch to growing illicit crops, aggravating already dramatic migration flows, adding to growing concerns about the sustainability of future coffee supply on top of the expected negative impact of climate change.
Professor Jeffrey Sachs of Columbia University presented the preliminary results of a study on prices based on ICO data, an initiative of the World Coffee Producers’ Forum with a contribution from the ICO, including suggested options under review to support industry and consumers to transfer funds back to poor growers.
His recommendations were not available at the time of writing.