t level since November 1994 when they averaged 153.33 US cents/lb.
ICO Coffee Report May 2023
CIP contracts to 175.48 US cents/lb despite Robustas reaching a 28 year high.
Every month, the International Coffee Organization posts a market report about the coffee industry. Here are some of the main points that we have seen in this report:
- South American exports decreased by 6.4% from April 2022 to April 2023. The main drivers of this region being Brazil, Colombia and Peru. While Colombia and Peru are both dealing with adverse weather, Peru is still dealing with political unrest. The frequent road closures make it tougher to export coffee.
- African exports have decreased by 9.8% from April 2022 to April 2023. The main drivers of this region being Ethiopia, Kenya, and Uganda. The Uganda Coffee Development Authority mentioned that the impacts of drought have impacted coffee harvesting, while in Ethiopia there are contract disputes stemming from a mismatch of local and global market prices.
- Central American exports increased by 6.3% from April 2022 to April 2023. The main drivers in this region are Costa Rica, Honduras and Nicaragua.
- Coffee exports from Asia and Oceania decreased by 1%, with the reduced exports from Indonesia (-24.6%) outweighing the gains made by Vietnam (+3.1%).
We recommend giving the whole report a read, and it can be found here.
The two trends that we are keeping an eye on are the effects of the current El Nino event on coffee production for this year, as well as the Robusta prices. The Robusta pricing has increased dramatically over the past few months, and analysts like Ryan Delany believe this stems from the previous highs in the Arabica prices. Because Arabica was expensive, the demand for Robusta shot up as it was seen as the replacement bean. You can read up on what Ryan Delany expects from the next 6 months in coffee here.
Have any questions or comments? Please reach out to us, we’d love to hear what your thoughts are about the coffee industry.
