LONDON, UK – Average prices for all groups indicators decreased in July 2022, says the Ico in the opening of its Coffee Market Report – the ICO Composite Indicator Price (I-CIP) was down 5.7% from June to July 2022, averaging 190.82 US cents/lb for the latter. In July 2022, the I-CIP fluctuated between 181.71 and 197.83 US cents/lb. Average prices for all group indicators decreased in July 2022.
The Brazilian Naturals fell the most, dropping 6.8% from June to July 2022, sinking to an average 214.8 US cents/lb for the month. The Colombian Milds and Other Milds, decreased by 5.1% and 6.5% respectively, month-on-month in July.
The former averaged 286.07 US cents/lb in July 2022, whilst the latter averaged 255.91 US cents/lb. The downturns are in part due to the average 2nd and 3rd positions of the New York futures market, which fell by 8.1% in July 2022 over June 2022.
The average of the 2nd and 3rd positions of the ICE Futures Europe for the Robustas decreased by 5.2%. This is reflected in the relatively lower rate of fall of the Robustas group indicator in July 2022, dropping down to an average 100.44 US cents/lb from 103.81 US Cents/lb in June, a 3.2% month-on-month decline.
All of the Arabicas lost ground against the Robustas in July 2022. The Brazilian Naturals suffered the biggest loss, with the differential falling by 9.7% month-on-month to 114.36 US Cents/lb from 126.59 US Cents/lb.
The Colombian Milds fared the best against the Robustas, despite the differential narrowing by 6.1% to 185.63 US Cents/lb in July 2022 from 197.76 US Cents/lb in June 2022.
Against the other Arabicas, on-the-other-hand, the Colombian Milds made second and third consecutive months of gain, increasing the differential to the Other Milds and Brazilian Naturals by 8.2% and 0.1%, to 30.16 US Cents/lb and 71.27/lb, respectively.
The arbitrage between the New York and London Futures markets shrunk by 10.1%, falling to 121.24 US Cents/lb in July 2022 from 134.90 US cents/lb in June 2022.
Intra-day volatility of the I-CIP decreased 1.1 percentage point between June and July 2022, reaching 10.1%. Robustas and the London futures market presented the lowest volatility amongst all group indicators, at 6.3% and 6.4% in July 2022.
The Brazilian Naturals volatility was the highest amongst the groups, averaging 12.3%, a 1.2 percentage point drop from the previous month.
The variation in volatility of the Colombian Milds and Other Milds for June to July 2022 is -0.6 to 9.6% and -0.2 to 10.8%, respectively. The volatility of the New York futures market gained by 0.2 percentage points, averaging 13.5% for the month of July 2022.
The New York certified stocks decreased 11.2% from the previous month, closing in at 1.03 million bags whilst certified stocks of Robusta coffee reached 1.76 million bags, representing an increase of 2.9%.
Global exports of green beans in June 2022 totalled 10.03 million bags, compared with 9.95 million bags in the same month of the previous year, up 0.8%. Three out of the four groups also increased their exports in June 2022, with only the Other Milds recording a fall, dropping by 13.5%.
Despite this increase in June, for the first nine months of coffee year 2021/22 exports of green beans totalled 89.09 million bags, up only 0.1% as compared with 89.04 million bags for the same period in coffee year 2020/21.
The Brazilian Naturals have continued their recovery, first seen in May 2022, in June, up 12.0% at 3.19 million bags as compared with 2.84 million bags in June 2021. The recovery is driven by Brazil, the biggest producer and exporter of the Brazilian Naturals, as the container and shipping issues it faced earlier in the current coffee year continue to be resolved.
In May and June 2022, exports of green beans in Brazil increased by 6.2% and 2.3%, respectively, following 10 consecutive months of negative growths. Nevertheless, exports of the Brazilian Naturals remain 6.8% down for the first nine months of coffee year 2021/22 at 29.08 million bags from 31.22 million bags in the same period a year ago, down 8.9%.
Exports of the Colombian Milds increased by 8.9% to 0.98 million bags in June 2022 versus 0.9 million bags in June 2021, driven primarily by Colombia, whose exports of green beans were up 5.4% in June 2022. Despite the jump, exports of the Colombian Milds from October 2021 to June 2022 remain down by 2.3% at 9.5 million bags as compared with 9.71 million bags in the first nine months of coffee year 2020/21.
The sharp increase in the growth of the Colombian Milds is technical, reflecting the 21.0% drop in exports in June 2021, which in turn was due largely to the spill-over of the social unrest occurring throughout Colombia in May, which hampered the normal flow of exports.
Shipments of the Other Milds decreased by 13.5% in June to 2.343 million bags from 2.7 million bags in the same period last year. For the first nine months of coffee year 2021/22, exports of the Other Milds were 17.79 million bags as compared with 17.33 million bags in October 2020 to June 2021, a 2.7% increase.
Exports of Robustas totalled 3.52 million bags in June 2022, as compared with 3.5 million bags in June 2021, up 0.5%. Exports of green beans for the first nine months of the current and previous coffee years for Robustas were 32.72 million bags and 30.77 million bags, respectively, up 6.3%.
In October 2021 to June 2022, South America’s exports of all forms of coffee decreased by 8.5% to 42.26 million bags. During this period, shipments from Brazil declined by 14.2% to 29.5 million bags from 34.4 million bags in October 2020 to June 2021.
Continuing issues with availability of containers and shipping capacity, albeit with reported improvements in recent months, and a smaller crop harvested during its Arabica “off-season”, are the main reasons for the sharp fall.
The volume of exports from Colombia is down 1.6% for the first nine months of coffee year 2021/22 at 9.24 million bags, versus 9.4 million bags for the same period last year. The fall in exports is linked to persistent unfavourable weather conditions reducing the available coffee supply in the country.
Exports of all forms of coffee from Asia and Oceania increased by 9.4% to 3.61 million bags in June 2022, and by 17.3% to 34.38 million bags in the first nine months of coffee year 2021/22. During these same periods, Vietnam’s exports increased by 12.9% to 2.36 million bags, and 20.0% to 22.77 million bags, respectively. India’s shipments were down 1.3% to 0.63 million bags in June 2022, but up 31.0% to 5.54 million bags in the first nine months of coffee year 2021/22. Exports from Indonesia increased by 15.8% to 0.52 million bags in June 2022 but were down 2.0% to 5.01 million bags in October 2021 to June 2022.
Exports of all forms of coffee from Africa decreased by 2.4% to 1.36 million bags in June 2022 from 1.39 million bags in June 2021. For the first nine months of the current coffee year, exports totalled 10.01 million bags as compared with 10.22 million bags in coffee year 2020/21.
Uganda’s exports have continued to fall, decreasing by 14.6% in June 2022 and 5.4% in October 2021 to June 2022 as compared with the same period a year ago. Lower production stemming from droughts in some parts of the country’s coffee-growing regions also continues to explain the fall in Uganda’s coffee exports. Exports from Tanzania were down 2.3% in the first nine months of coffee year 2021/22 at 0.83 million bags as compared with 0.85 million bags for the same period last year. Over the same period, exports from Ethiopia increased 14.5% to 2.75 million bags from 2.4 million bags.
In June 2022, exports of all forms of coffee from Mexico and Central America were down 16.9% to 1.81 million bags as compared with 2.18 million in June 2021. For the first nine months of the current coffee year, exports are down 3.7%, totalling 12.12 million bags as compared with 12.58 million bags in October 2020 to June 2021.
The region’s sharp downturn in June was due to the 33.5% fall in exports from Honduras, the largest exporter of the region, which shipped 0.52 million bags in June 2022 as compared with 0.78 million bags in June 2021. For the first nine months of coffee year 2021/22, Honduras exported 3.85 million bags, down 15.5% from 4.56 million bags in the same period in coffee year 2020/21.
Less rainfall during the bean-filling period across a number of growing regions, a high incidence of rust disease as a result of hurricanes Eta and Iota in 2020, and stumping following an earlier outbreak of rust disease in 2012 led renewal that reached peak production between the 2018/2020 harvests, hence the country’s coffee supply continues to negatively affect exports from Honduras.
Total exports of soluble coffee increased by 7.6% in June 2022 to 1.01 million bags versus 0.94 million bags in June 2021. In the first nine months of coffee year 2021/22, a total of 9.05 million bags of soluble coffee were exported, representing an increase of 4.3% from the 8.68 million bags exported in the same period during the previous coffee year.
The share of soluble coffee within the total exports of all forms of coffee was 10.0% (measured on a moving 12-month average) in June 2022, the same as in June 2021. Brazil is the largest exporter of soluble coffee, shipping 2.96 million bags in the first nine months of coffee year 2021/22, followed by India with 1.6 million bags. Indonesia takes third place with 1.25 million bags exported over the same period.
Exports of roasted beans decreased by 11.2% in June 2022 to 72,472 bags, down from 81,610 bags in June 2021.
The latest provisional outlook for total production in coffee year 2021/22 remains unchanged at 167.2 million bags, a 2.1% decrease as compared to 170.83 million bags of the previous coffee year.
World coffee consumption is still projected to grow by 3.3%, to 170.3 million 60-kg bags in 2021/22 as compared to 164.9 million for coffee year 2020/21. In 2021/22, consumption is expected to exceed production by 3.1 million bags.
