Coffee prices fell to a 14-month low in March, despite fewer shipments and increased estimates of global consumption, according to the latest monthly report from the London-based International Coffee Organization.
March marked the fifth consecutive month of coffee price declines, a trend the ICO attributes to speculation regarding the 2015/16 Brazil crop. Prices dropped among all categories of arabicas (Brazilian naturals, Colombian milds, and other milds), as well as for robusta. The ICO’s composite indicator price, comprising all four categories, averaged $1.270 USD per pound in March, representing a 10 percent drop from February’s average of $1.411. For comparison’s sake, the monthly average price of coffee in October 2014 was $1.85.
“Daily price movements showed no clear trend over the course of the month, hitting a low of 120.50 and a high of 131.78 (cents) but finishing at around the same level it started,” the ICO said. “Price volatility was also notably higher in March compared to last month.”
While the forthcoming Brazil crop remains an influential question mark, the ICO’s March report includes some illuminating statistics related to coffee consumption, which appears to be steadily picking up throughout the world, but most notably in emerging markets, including both consuming and producing countries.
The group estimates that global consumption in the 2014 calendar year reached 149.3 million bags, representing an annual average growth rate over the past four years of 2.3 percent, which is significantly higher than the approximately 1.4 percent global population growth rate.
“The strongest growth over this time has been found in emerging markets, averaging 4.6 percent since 2011, with particularly strong demand in Russia, South Korea, Algeria and Turkey,” the ICO said. “Traditional consuming markets, such as the EU, USA and Japan, account for over 50 percent of the world total, but have been growing at a more modest rate of 1.5 percent in the time period.”
The ICO also offers this juicy little tidbit related to the U.S. and Canada markets:
It is thought that the move towards specialty coffee consumption and single-serve pod machines is increasing the value of demand more than the volume, although the USA and Canada are still exhibiting considerable market growth.
Read the complete report here.