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ICO Executive Director José Sette believes coffee price will remain low in 2019

From the January 2019 issue.

Due to an excess of supply, the International Coffee Organization's José Sette says coffee prices are unlikely to rise in 2019.

Coffee prices are likely to continue at low levels during 2019, due to the high supply generated by increased harvests in 2018, leading to rising export volumes and a build-up of inventories in importing countries. Adequate stocks mean that the roasting industry is covered against any shortfall in green coffee supplies during the first semester of 2019, reducing the scope for a rapid price recovery. However, Arabica production will probably fall, since this is an off-year in the biennial cycle for a number of countries.

Further, world consumption, estimated at 161.9 million bags in 2017-18, is anticipated to continue rising, which will reduce the surplus generated by a supply of over 163.5 million bags in the same year. The impact of excess supply on prices has been exacerbated by speculative movements of investment funds.

Meanwhile, consolidation of trade and the industry is an ongoing feature of the coffee industry, and continues today with increased merger and acquisition activity.

One of the main drivers of a sustainable coffee industry remains the development of consumption, especially in coffee-producing countries, to help maintain a balance between supply and demand.

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