November 2019 marked the first time in the last 12 months when the ICO Composite Indicator consistently stayed over 100 US cents/lb. The monthly average of the Indicator rose 10.1% to 107.23 US cents/lb amid expectations of a global deficit in coffee year 2019/20, estimated at 502,000 bags.
Global exports of coffee in October 2019 fell by 13.4%, to 8.91 million bags, compared to the same month in the previous year. A mix of factors, including unfavourable weather patterns and prolonged low international prices, have contributed to a decline in shipments across all regions.
The ICO composite indicator rallied in November 2019, reaching a 12-month high, even as the Brazilian Real slumped to a record low against the US Dollar. The daily price of the ICO composite rose from 102.74 US cents/lb at the beginning of November to a high of 111.86 on 25 November 2019,
before closing the month at 111.77 US cents/lb. While the daily price has been on an upward trend since mid-October 2019, the November average of 107.23 US cents/lb was 10.1% higher than last month.
Prices for all group indicators rose in November 2019. Brazilian Naturals saw the largest increase, of 12.1%, to 109.94 US cents/lb, reflecting in part the biennial decline in the production of Brazilian Arabica as well as the weakness of the Brazilian currency. Other Milds rose 11% to 140.98 US cents/lb,
while Colombian Milds rose 10.6% to 146.12 US cents/lb. The differential between Colombian Milds and Other Milds continued its ascent in November 2019, rising 0.8% to 5.14 US cents/lb. Prices for Robustas increased 6.8% month-on-month to 73.28 US cents/lb.
- Arbitrage between Arabica and Robusta coffees, as measured on the New York and London futures
markets, increased sharply to 50.31 US cents/lb, its highest level since January 2017. - The volatility of the ICO composite indicator increased by 0.9 percentage points to 7.1% over the past month.
- Global exports in October 2019 totalled 8.91 million bags, their lowest monthly level since September 2017.
- Exports from South America amounted to 5.29 million bags in October 2019, led by 3.42 million bags from Brazil
- At 1.21 million bags, Colombian exports grew 13.9% in October 2019 compared to the same month in 2018.
- Exports from Asia & Oceania fell by 23.5% to 2.26 million bags in October 2019.
- Uganda’s exports of 378,238 bags led shipments from African countries, followed by Ethiopia.
- With an export volume of 403,635 bags, Mexico & Central America started the coffee year with a 17.3% decline in shipments compared to October 2018.
- The ICO maintains its preliminary forecast of a small global deficit of about 502,000 bags in coffee year 2019/20.
