LONDON – The ongoing deterioration of coffee prices steadied slightly in November, but the monthly averages of all the ICO indicator prices remain at multi-year lows. The ICO composite indicator price averaged 100.99 US cents/lb, 5.6% lower than October and the lowest monthly level in six and a half years.
The strongest decline was observed in Colombian Milds, which fell by 6.9% compared to October, with decreases of 5.2% and 6.4% recorded in Other Milds and Brazilian Naturals. These represent their lowest monthly averages since July 2007, December 2008 and May 2007 respectively.
Robustas prices fell by 4.8% to 79.71 US cents/lb, leading to a narrowing of the arbitrage between New York and London of 8.7%.
Total production for crop year 2012/13 is maintained at around 145.2 million bags, up 9.8% on the previous year.
In 2013/14, Brazil is in the off‐year of its biennial cycle, and production is therefore estimated at 47.5 million bags, down 6.5% on 2012/13.
Elsewhere, adverse weather conditions in Vietnam and Indonesia have also disrupted production, although Colombia is expected to benefit from its ongoing recovery.
Furthermore, the effects of coffee leaf rust in Central America are likely to cause a drop in output of around 1.2 million bags, or 9.7% of regional production, according to ICAFE.
Total exports in October, the first month of the new coffee year, amounted to 8.5 million bags, down 9.6% on October 2012.
The biggest drop was seen in Robustas, which were an estimated 864,092 bags lower than the previous year, with exports from Vietnam and Indonesia slowing considerably as farmers hold back from selling their crop.
Decreases of 183,620 bags and 144,397 bags were recorded in Other Milds and Brazilian Naturals, respectively.
Exports of Colombian Milds, on the other hand, were 288,243 bags higher.
The high rate of exports over the last few years has also contributed to a build‐up of stocks in importing countries.
As of June 2013, green coffee inventories in the EU, USA and Japan stood at 6.4 million bags, 5.2 million bags and 2.8 million bags, respectively.
Certified stocks of Robusta on the London futures market, on the other hand, have fallen dramatically from over 5 million bags in November 2011 to just 766,000 bags in November 2013.
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