Coffee Prices at 20 Month Low, ICO says

Despite a brief rise in prices in August, coffee prices once again tumbled down last month, at one point reaching a twenty month low.

The latest Coffee Market Report from the International Coffee Organization (ICO) once again made for some grim reading, with the weakness of the Brazilian real and Colombian peso again being cited as an influential factor behind the decline.

According to the figures released by the ICO, the composite average price of coffee dropped by 6.7% to $1.13 per pound, the largest monthly fall since March and the lowest price recorded since the turn of 2014.

The ICO measure their averages by taking a composite figure from four different prices, those for Brazilian Naturals, Colombian Milds, Other Milds and Robusta. It was the drop in value of the three arabica categories that contributed to this month’s fall in pricing.

This is despite less coffee being available to purchase, which you would think would help drive up prices. Global exports are down by two million bags (102 million from 104 million) and the Brazilian coffee agency Conab have even revised their projections downwards, stating that Brazil’s harvest will come in at around 42 million bags instead of the previously predicted 44 million.

There has been some hope, however, as coffee futures markets jumped up last week, reaching their highest prices in two months, topping out at $1.36 per pound.

In a rather gloomy statement, the ICO told everybody to “keep an eye on weather patterns, particularly given the ongoing dryness in Central America, and the potential impact of El Nino in coffee growing regions,” suggesting that the industry could take a further walloping next year.