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International coffee prices see sustained growth over June

The monthly average of the International Coffee Organization (ICO) composite indicator rose 7.1 per cent to 99.97 US cents per pound in June 2019. This marks the first increase in the monthly average since January 2019.

The daily composite indicator ranged between 95.17 US cents per pound on 18 June and 105.25 US cents per pound on 28 June. The daily price rose above US$1 for the first time since 18 February 2019 on 30 May and remained above that level for nine days.

Average prices for all group indicators rose in June. Brazilian Naturals experienced the largest increase, averaging 100.69 US cents per pound, 9.5 per cent higher than in May 2019.

Robusta prices grew by 4.1 per cent to 74.02 US cents per pound. Colombian Milds increased by 7.3 per cent to 133.49 US cents per pound while Other Milds rose by 7.6 per cent to 129.73 US cents per pound.

In May 2019, world coffee exports rose by 19.4 per cent to 11.6 million 60-kilogram bags compared to May 2018, while exports in the first eight months of coffee year 2018/19 rose by 7.5 per cent to 86.57 million bags.

The ICO says demand for coffee appears to be strong, as imports by its importing members and the United States, which account for around 75 per cent of global imports, increased by 4.9 per cent to 66.56 million bags in the first six months of coffee year 2018/19.

Imports from Brazil and Colombia accounted for 52.4 per cent of US imports in the first six months of coffee year 2018/19. Vietnam represented 10.2 per cent, Mexico 5.7 per cent, and Peru 5.1 per cent. Shipments from the five largest origins increased in October 2018 to March 2019, except from Vietnam where they declined 19.7 per cent to 1.53 million bags.

Brazil was the largest source of coffee imports by the European Union, accounting for 20.9 per cent from October 2018 to March 2019. This was followed by Vietnam at 15 per cent, Colombia at 3.8 per cent, Peru at 3.6 per cent, and Honduras at three per cent.

Global coffee consumption is estimated to grow by 2 per cent to 164.64 million bags in coffee year 2018/19. Despite the ongoing demand growth, a global production surplus of 3.11 million bags is expected in coffee year 2018/19.

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