The coffee market fell again in December 2015, reaching its second lowest monthly average of the year. This decrease was entirely attributable to the drop in Robusta prices over the course of the month.
Thursday, January 14, 2016
From the report by the International Coffee Organization:
Coffee prices maintain downward trend as 2015/16 production estimates show slight recovery
The coffee market fell again in December 2015, reaching its second lowest monthly average of the year. This decrease was entirely attributable to the drop in Robusta prices over the course of the month. Our first estimate of coffee production in crop year 2015/16 comes to 143.4 million bags, a slight 1.4% recovery compared to 2014/15, which has been revised lower to 141.4 million. Lower production in Brazil as estimated by Conab has been compensated by increases provisionally estimated in Vietnam, Colombia and Indonesia, among others.
The downward trend in the coffee market over the last 15 months continued in December, although the rate of decline slowed. The monthly average of the ICO composite settled on 114.63 US cents/lb, down by 0.3% compared to November. This is nearly 24% lower than its
level in December 2014, albeit 7.6% higher than December 2013. Over the last six months, coffee prices have remained in a relatively narrow range between 110 and 130 cents, whereas the first six months of 2015 saw a much greater range of 115 to 155 cents.
The performance of the four group indicator prices was quite different, as the three Arabica groups saw minor increases of between 0.5 and 0.9%, while Robusta was down by 3%. The monthly average of the Robustas indicator came to 79.28 US cents/lb, which is its lowest level
since June 2010. As a result, the arbitrage between Arabica and Robusta has increased to 53.75 cents, up 6.8% compared to November.
World coffee production in 2015/16 is provisionally estimated at around 143.4 million bags, representing a recovery of 1.4% compared to 2014/15, which has been revised down to 141.4 million bags. Total production of Arabica is relatively unchanged on 84.3 million bags
compared to 84.4 million last year, as lower production of Brazilian Naturals is matched by increases in Colombian Milds and Other Milds. A significant increase of 3.7% is expected in Robustas, with both Vietnam and Indonesia provisionally estimated higher.
Global coffee output for 2017/18 is preliminary estimated at 158.78 million bags, 0.7% higher than last year.
Total production of Arabica is estimated to decrease by 1.1% to 97.32 million bags compared to 98.42 million bags last year, as lower production of Colombian Milds and Brazilian Naturals are only partially offset by increases in Other Milds.
Arabica and Robusta prices went in opposite directions this month, with Arabica prices dropping back down after March’s rally, while Robusta increased to the highest monthly average since November.
From the "Report on the coffee market in April 2016" by the International Coffee Organization:
In December 2014 coffee prices continued to fall, and the monthly average indicative price calculated by the International Coffee Organization was the lowest since February.
From 'Coffee Market Report - December 2014' by the International Coffee Organization (ICO):
The coffee market ended 2014 with the lowest level in ten months
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