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ARABICA PRICE FALLS AFTER BRIEF BOOST IN JANUARY

ARABICA PRICE FALLS AFTER BRIEF BOOST IN JANUARY



The International Coffee Organization (ICO) says that in January 2017, the coffee market recovered from the fall in prices which was recorded towards the end of last year (although prices dipped again in February).

“While a price increase could be observed across all groups, it was most notable for Robusta,” said the ICO. “Exports for the first quarter of coffee year 2016/17 were 8.3 per cent higher than last year at 29.8 million bags.”

The ICO noted that Conab has released its first estimates of coffee production in Brazil for the upcoming crop year 2017/18, projecting a reduction of around 10 per cent in crop compared to the current year. Large export volumes and the high levels of stocks in consuming countries seem likely to put pressure on price levels.

Coffee prices increased in January with the monthly average of the ICO composite indicator up by 5.6 per cent to 139.07 US cents/lb compared to 131.70 US cents/lb in December 2016. Although the monthly average of the ICO composite price has significantly improved in January, it remains below the level of 145.82 US cents/lb recorded in November 2016.

In view of the steady level of exports and news of more favourable weather conditions in Brazil, the positive trend reversed towards the end of January after the daily price peaked on 23 January at 144.54 US cents/lb

The ICO said the most pronounced price increase was for the Robusta group, which rose by 6.4 per cent to 108.32 US cents/lb, the highest monthly level since September 2011. This increase can mainly be attributed to supply shortages stemming from a small Conilon crop in Brazil and reduced crop forecasts for Vietnam and Indonesia. As a result, roasters are increasingly substituting other Robusta origins or lower grade Arabica in blends.

At the time of writing the C price was 145.3 US cents, down from 155 US cents in mid/late February.

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