Raw coffee prices worldwide continue to slide, in November hitting their lowest point since May 2010, according to the monthly report from the London-based International Coffee Organization.
Much of the average price drop can be attributed to a worldwide increase in production and a glut in supply. ICO says production is 8.4 percent higher than it was at this point last year, with arabica leading the increase (10.6 percent over last year). Here’s a brief summary of the current coffee market direct from the ICO:
Global Coffee Report (November 2012)
Coffee prices slipped further in November, as the ICO composite indicator price fell by 7.3% to 136.35 US cents/lb, its lowest level since May 2010. All group indicators decreased, with Colombian Milds, Other Milds and Brazilian Naturals at their lowest levels in over two years. The differential between prices of Arabica and Robusta indicators also fell month on month.
In terms of market fundamentals, this market report contains an initial assessment of production in crop year 2012/13 by all exporting countries. On the basis of information currently available, world production is estimated at 146 million bags, an increase of 8.4% on the 134.6 million bags in 2011/12. This increase is driven mostly by production of Arabicas, which are anticipated to increase by 10.6%, with Robustas also increasing by an estimated 5.1%.
Exports by all exporting countries reached 8.9 million bags in October 2012, 17.3% higher than the same month last year. This brings total exports for January to October 2012 to 92.2 million bags, compared with 87.5 million bags for the same period in 2011.