Despite Upturn At The End, Global Coffee Prices Remain The Lowest Monthly Average Of The Coffee Year
The monthly average of the ICO composite indicator fell to 93.33 US cents/lb in May 2019, 1.2% lower than in April 2019. However, the last two weeks of the month saw a sharp reversal in the downward trend as the daily composite indicator rose above 100 US cents/lb for the first time since 18 February 2019 on 30 and 31 May, at 101.17 US cents/lb and 103.25 US cents/lb, respectively. In April 2019, world coffee exports rose by 4.6% to 10.73 million bags compared to the same month in the previous year, while exports in the first seven months of coffee year 2018/19 reached 74.01 million bags compared to 70.89 million bags in 2017/18. While demand has grown at an average annual rate of 2.2% in the last five years, global output is expected to exceed it by 3.41 million bags in coffee year 2018/19, making this the second consecutive year of surplus.
Although the monthly average of the ICO composite indicator fell to 93.33 US cents/lb in May 2019, 1.2% lower than in April 2019, the last two weeks of the month saw a sharp reversal in the downward trend. The daily composite indicator reached its lowest point on 7 May, when it fell to 89.31 US cents/lb. However, on 30 and 31 May, it reached 101.17 US cents/lb and 103.25 US cents/lb, respectively. This is the first time since 18 February 2019 when the daily composite indicator was over 100 US cents/lb. Market fundamentals, including reports of adverse weather negatively affecting Brazil’s new crop, and a strengthening of the Brazilian real in the second half of May are the main drivers of the daily composite price in May.
