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.
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 is the editor of Daily Coffee News by Roast Magazine. Feedback and story ideas are welcome at publisher (at) dailycoffeenews.com, or see the "About Us" page for contact information.