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Coffee market : July 2019 update

August 9, 2019

1 mins read

Global coffee prices suffered high losses in July 2019, mainly driven by better expectations of global bean availability for the current marketing year. Arabica coffee prices, quoted by New-York ICE (Intercontinental Exchange), decreased by 14% m-o-m. Robusta coffee prices on London ICE declined by 11% m-o-m.

The ICO’s (International Coffee Organisation) forecast revision for the 2018/19 marketing year has been the key determinant of the prices plunging in the last weeks. The global organisation raised its estimated surplus from 3.11 million bags in July to 3.92 million bags in August 2019. The surplus had been decreased in June driven by market concerns on Vietnam 2018/19 production. Recent low coffee prices, rising labour and fertilizers costs have encouraged Vietnamese farmers to switch coffee crops towards more profitable commodities, supporting the prices of Robusta coffee on the global market in June. Despite lower production, Vietnam exports have risen by 24% in July 2019 (General Department of Vietnam Customs) compared to the same time in 2018.

In South America, coffee crops have benefited from dry weather conditions in Brazil during June and July. As a result, Cooxupe reported that Brazilian coffee harvest was 66% completed as of 12th July, compared to 46% at the same time last year. Additionally, the weak Brazilian real (against the dollar) has encouraged coffee exports from Brazil to the main consuming countries.

In Colombia, the Colombian Coffee Growers Federation indicated a production jump by 25% at 1.3 million bags in July y-o-y. Colombian coffee production from January to July 2019 increased by 5.4% compared to the first six months of 2018, adding further downward pressure to global coffee prices.

Topics: Beverages
Anais Divanach
Anais Divanach

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