According to the International Coffee Organization (ICO) April 2020 Coffee Market Report, the ICO composite indicator decreased by 0.1 per cent to 108.91 US cents per pound in April.
After reaching a high of 113.86 US cents per pound on 15 April, the daily indicator price declined over the next two weeks and reached a low of 103.63 US cents per pound on 27 April.
The ICO says concerns over disruptions to the supply chain are being weighed against the uncertainty over the future of demand in the unprecedented situation of COVID-19.
Prices for both Mild Arabica group indicators trended upwards in April 2020. Other Milds rose by 4.2 per cent to 154.52 US cents per pound, and Colombian Milds by 1.8 per cent to 161.92 US cents per pound. As a result, the differential between Colombian Milds and Other Milds narrowed by 30.6 per cent to 7.40 US cents per pound.
In contrast, prices for Brazilian Naturals fell by 1.5 per cent to 111.22 US cents per pound, resulting in a price differential of 50.70 US cents per pound from Colombian Milds and 43.30 US cents per pound from Other Milds. Robusta prices also fell in April 2020, averaging 63.97 US cents per pound, 5.2 per cent lower than in the previous month. This also represents the lowest monthly average for Robusta prices since June 2006 when it reached 60.23 US cents per pound.
The New York Arabica futures market fell by 0.5 per cent to an average of 115.55 US cents per pound in April 2020, while the London Robusta futures market declined by 5.2 per cent to 54.4 US cents per pound.
As a result, the spread between Arabica and Robusta coffees, as measured on the New York and London futures markets, increased to 61.15 US cents per pound, which is 4.2 per cent higher than in March. Certified Arabica stocks decreased by 7.9 per cent month-on-month to 2.11 million bags in April 2020, which is the third consecutive month of decline.
The volatility of the ICO composite indicator increased by 1 per cent to 10.6 per cent as the volatility of all group indicators grew in April 2020.
Global exports fell by 3.7 per cent to 11.06 million bags in March 2020 and shipments in the first six months of coffee year 2019/20 decreased by 3.9 per cent to 61.96 million bags.
In coffee year 2019/20, the ICO’s estimate of global coffee consumption has been revised to 166.06 million bags, which represents an increase of 0.5 per cent compared to 165.27 million bags in 2018/19. As a result, production is expected to exceed consumption by 1.95 million bags.