The International Coffee Organisation (ICO) has released its latest Coffee Market Report, and it’s brimming with insights into the coffee industry’s current state. One standout feature in the report is the near-record high value of Robusta coffee, which is currently sitting at an impressive 124.62 US cents per pound. Let’s dive into the key highlights and trends from the report.
Robusta’s Rising Value
Robusta coffee enthusiasts have reason to celebrate as the report reveals that the value of Robusta beans reached a near-record high in August. At 124.62 US cents per pound, this robust performance is a testament to the enduring popularity of Robusta coffee, known for its strong, full-bodied flavor. The steady increase in Robusta’s value underscores its importance in the global coffee market.
Robusta Exports Surge
Robusta’s popularity isn’t just limited to its value; its export numbers also tell a compelling story. In July 2023, green bean exports of Robusta reached 3.59 million bags, marking an impressive 11.6 percent increase compared to the same period in 2022. This substantial growth in exports highlights the global demand for Robusta coffee, with consumers appreciating its distinct taste and versatility.
ICO Composite Indicator Price (I-CIP)
The ICO Composite Indicator Price (I-CIP) is another critical metric in the coffee market, reflecting the overall price trends. In August, the I-CIP averaged 154.53 US cents per pound, with a median value of 151.1 US cents per pound. These numbers fluctuated between 148.79 and 163.62 US cents per pound, indicating dynamic market conditions that coffee stakeholders must monitor closely.
Colombian and Other Milds Differential
The Colombian Milds-Other Milds differential is a key factor for coffee producers in this category. After an inverted differential in July, it pivoted from -2.91 to 0.82 US cents per pound, returning to positive territory. This shift can have significant implications for producers and highlights the volatility of the coffee market.
Arbitrage between London and New York Futures Markets
The arbitrage measured between the London and New York Futures markets narrowed by 1.6 percent to 45.23 US cents per pound in August. This change in arbitrage rates can influence trading strategies and market dynamics, making it a crucial factor for coffee traders and investors to consider.
Regional Export Trends
The report also provides insights into regional export trends. While exports of all forms of coffee from South America decreased by 2.2 percent in July 2023, Mexico and Central America saw their exports increase by 9.4 percent during the same period. These shifts in regional exports can have a significant impact on global supply and demand dynamics.
World coffee production and consumption are two key indicators for the coffee market’s overall health. World coffee production decreased by 1.4 percent year-on-year to 168.5 million bags in coffee year 2021-22 but is expected to bounce back by 1.7 percent to 171.3 million bags in 2022/23. On the other hand, world coffee consumption increased by 4.2 percent to 175.6 million bags in coffee year 2021/22, and the ICO expects this number to rise by 1.7 percent to 178.5 million bags in 2022/23.
The ICO’s Coffee Market Report for August paints a dynamic picture of the coffee industry. Robusta’s impressive value, export growth, and market fluctuations are just a few of the factors contributing to the industry’s ever-evolving landscape. With a projected deficit of 7.3 million bags in coffee year 2022/23, the coffee market is poised for another year of challenges and opportunities.
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