Worldwide coffee prices have dropped to their lowest level in nearly four years, to the point that the International Coffee Organization is warning that production volumes and quality may suffer over the next two years.
Creative Commons photo by Michael Allen Smith
Price drops were marked in all four categories — Colombian Milds, Other Milds, Brazilian Naturals and Robustas — tracked in the ICO’s composite indicator price, an estimated measure for green coffee beans worldwide. Robustas had the largest drop this month (8.5 percent), while the composite price for all groups reached its lowest since September 2009.
The ICO’s report for June says that low overall commodity prices combined with market volatility in China and the United States have been responsible for the recent downturn. The London-based group noted that total exports for the first eight months of coffee year 2012/13 (October to May) have reached 75.7 million bags, compared to 72 million in the same period last year.
With stockpiles still high, the group expressed concern that many producers may be unwilling to continue investing in their crops, saying in its monthly report: “This could potentially have a negative impact on production volumes and quality over the next couple of years, resulting in increased price volatility and a less sustainable agricultural value chain.”
Nick Brown
Nick Brown is the editor of Daily Coffee News by Roast Magazine.
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Never mind price drops as it is another way to rip off the farmer while actual retail coffee prices have not fallen. The problem with coffee is not the growers. I think growers do 95% of the effort to have coffee ready for the consumer, the coffee lover but the monetary reward goes to those who put in 5% or less effort ( just roast and pack). It is all about GREED at it’s best by the West at the expense of the poor grower.
I already have seen in El Salvador a reduction in the crops investments by producers, a lot of people will not be hired to work this year because the expected low prices, this is additional to the damage generated by coffee rust.
Brazil, Vietnam and Colombia just need to limit their production. Why grow more than the world can drink?