Coffee prices worldwide reached their lowest since February 2014, largely driven by improved expectations for Brazil’s 2015/16 crop, according to the December monthly report from the London-based International Coffee Organization.
The ICO’s composite indicator price — a historical data series that reflects price monitoring for coffees from all the world’s main growing regions — dipped to a low of $1.422 USD per pound in December, finishing the month at a 10-month low average of $1.506. The ICO says revised upward estimates coming from public and private sources monitoring Brazil’s current crop, including the USDA and CONAB, help explain the downward price trend.
“The market remains well supplied with coffee, and expectations regarding Brazil’s 2015/16 crop seem to be improving,” the ICO said. “Several recent reports have forecast an increase in production in the next year, with sufficient stocks available to cover the shortfall in 2014/15.”
The ICO’s price for Brazilian naturals dropped 8.2 percent from November’s average, while Colombian Milds dropped 7.9 percent and Other Milds dropped 7.5 percent. Of the four primary coffee groups, Robustas saw the least dramatic decrease, at 4.5 percent.
In its production forecasts, the ICO now puts world production for 2014/15 at 141.4 bags, a 3.6 percent decrease from 2013/14. “Production of both Arabica and Robusta coffee is expected to fall, by 3.7% and 3.6% respectively,” the ICO said.
Click here for the ICO’s complete December 2014 coffee report.