LONDON, UK – The ICO composite indicator in December increased by 4.6% to 114.74 US cents/lb as prices for Arabica group indicators increased, according to the Ico’s Coffee Market Report for the month of December, which was released on Wednesday. The largest increase occurred for Brazilian Naturals, which grew by 8% to114.96 US cents/lb, which is the highest monthly average since December 2019 when they reached 126.36 US cents/lb. Colombian Milds rose by 5.7% to 170.44 US cents/lb and Other Milds by 4.7% to 157.81 US cents/lb, which are both higher than their average in December 2019.
However, prices for Robusta fell by 0.5% to 72.04 US cents/lb. In the first two months of coffee year 2020/21, total exports were 6.5% higher at 20.2 million bags compared to the same period last year as shipments for all groups declined except Brazilian Naturals, which rose by 23.1% to 8.31 million bags.
Likely due to the impact of the covid-19 pandemic, imports by ICO importing Members and the United States decreased by 4.5% to 129.98 million bags i n coffee year 2019/20. While both green and roasted imports declined in coffee year 2019/20, imports of soluble coffee increased by 1% to 14.4 million bags. In coffee year 20 19/20, re- exports by ICO importing Members and the United States rose by 0.4% to 46.93 million bags
The monthly average of the ICO composite indicator rose by 4.6% to 114.74 US cents/lb in December 2020. The daily composite indicator fell to a low of 110.35 US cents/lb on 9 December before climbing back up to 116.98 on 17 December. The daily price remained at a similar level for the remainder of the month until reaching a high of 119.21 US cents/lb on 31 December. Prices in December were supported by sustained demand as evidenced by a continued drawdown in green coffee stocks in large importing countries, such as the USA, as well as the depreciation of the US dollar.
Additionally, while exports from Brazil have surged due to the sizeable 2020/21 crop, this was partially offset by a decline in shipments from other Arabica producers, reducing the downward pressure on prices.
Prices for all Arabica group indicators rose in December 2020. The average price for Colombian Milds rose by 5.7% to 170.44 US cents/lb, which is the highest monthly average since November 2016 when it averaged 177.85 US cents/lb. After declining in October and November 2020, the average price for Other Milds rose by 4.7% to 157.81 US cents/lb. As a result, the differential between Colombia Milds and Other Milds rose by 20.5% to 12.63 US cents/lb, which is the largest difference since June 2012 when it reached 15.98 US cents/lb. The average price for Brazilian Naturals grew by 8% to 114.96 US cents/lb, while Robusta prices averaged 72.04 US cents/lb, 0.5% lower than in November 2020.
The average arbitrage in November, as measured on the New York and London futures markets, rose by 17.8% to 62.05 US cents/lb. Stocks of certified Arabica increased by 8.6% to 1.52 million bags in December 2020, which is the third consecutive month of increase. Certified Robusta stocks amounted to 2.31 million bags, 3.1% higher than in November 2020.
The volatility of the ICO composite indicator price increased by 1.9 percentage points to 8.4% as the volatility for all Arabica indicators increased, while the volatility for Robusta prices was 6.1%, unchanged from November 2020. The volatility for Colombian Milds rose by 2.4 percentage points to 8.6%, for Other Milds by 2.2 percentage points to 9.2%. and for Brazilian Naturals by 2.8 percentage points to 12.2% in December 2020.
Global exports in November 2020 reached 10.15 million bags, which represents an increase of 5.7% compared to November 2019. Robusta shipments totalled 3.31 million bags, 10.7% lower than in November 2019 when they reached a record 3.7 million bags. Shipments of Arabica rose by 16% to 6.84 million bags. Brazilian Naturals saw the largest increase, growing 29.9% to 4.21 million bags, reflecting the on-year Arabica crop from Brazil. Colombian Milds increased by 3.6% to 1.32 million bags, as exports from Colombia grew by 8.8% to 1.26 million bags despite lower production in November 2020 compared to November 2019. However, shipments of Other Milds fell by 5.1% to 1.3 million bags as exports from Honduras dropped 48% to 55,500 bags.
In the first two months of coffee year 2020/21, total exports were 6.5% higher at 20.2 million bags, compared to 18.97 million bags for the same period last year. Shipments for all groups declined except Brazilian Naturals, which rose by 23.1% to 8.31 million bags. Exports of Colombian Milds decreased by 4.5% to 2.48 million bags, Other Milds fell by 5% to 2.75 million bags, and Robusta declined by 1% to 6.66 million bags. This growth came primarily from shipments of green Arabica, which reached 12.56 million bags, 11.9% higher than the first two months of coffee year 2019/20. Green Robusta exports increased by 1.1% to 5.79 million bags. In contrast, exports of roasted coffee from producing countries fell by 5.5% to 103,800 bags, and shipments of soluble coffee decreased by 8.2% to 1.75 million bags.
Imports from all origins by ICO importing Members and the United States, decreased by 2.8% to 10.58 million bags in September 2020. In coffee year 2019/20, their total imports declined by 4.5% to 129.98 million bags. Imports by the EU in coffee year 2019/20 fell by 2.6% to 78.32 million bags with Brazil, Viet Nam and intra-EU trade as the main origins.
Imports by the USA declined by 10% to 28.36 million bags, and Brazil, Colombia and Viet Nam were the main source. Japan’s imports decreased by 10% to 7.34 million bags with Brazil, Viet Nam and Colombia as the top three origins. Imports by the Russian Federation grew by 7.6% to 6.22 million bags, while those of the United Kingdom declined by 13.4% to 5 million bags. Imports by Switzerland, Norway and Tunisia increased by 9% to 3.41 million bags, 0.4% to 802,400 bags and 6.2% to 527,000 bags, respectively.
Green coffee imports by ICO Members and the USA decreased by 5.4% to 95.98 million bags in coffee year 2019/20 while roasted imports declined by 3.7% to 19.6 million bags. However, imports of soluble coffee increased by 1% to 14.41 million bags. Although roasted coffee imports declined for most ICO Members and the USA, Switzerland’s roasted coffee imports rose by 9.6% to 257,000 bags with Italy, Germany and the Netherlands as the main origins. In contrast, soluble imports rose for the USA and all ICO Members except the EU and the United Kingdom. Soluble imports by the EU fell by 2.2% to 7.73 million bags while those of the UK decreased by 7.4% to 1.14 million bags.
Re-exports by ICO importing Members and the United States, increased by 8.3% to 4.31 million bags in September 2020. In coffee year 2019/20, their total re-exports rose by 0.4% to 46.93 million bags. Re-exports by the EU in coffee year 2019/20 fell by 0.3% to 38.56 million bags, while those of the USA by declined 6% to 2.66 million bags. Re-exports from the United Kingdom fell by 24.6% to 1.45 million bags. However, re-exports by all other ICO importing Members increased. Japan’s re-exports more than doubled to 309,700 bags due to strong growth in soluble re-exports, particularly to the Russian Federation, Japan, and China. Re-exports from Norway grew by 46.3% to 20,700 bags on increased shipments to the EU, notably Denmark, Sweden, and the United Kingdom. The Russian Federation’s re-exports rose by 45.7% to 1.59 million bags as both roasted and soluble shipments increased. The main destinations for the Russian Federations’ roasted re-exports were Belarus, the Ukraine, and Georgia and for soluble re-exports were Belarus, Kazakhstan, and Uzbekistan.
Re-exports from Switzerland increased by 14% to 2.34 million bags with much of the growth from re-exports of roasted coffee to France, USA and Germany as well as newer markets like the Republic of Korea and Indonesia. Tunisia’s re-exports grew by 6.1% to 157 bags.
In coffee year 2019/20, re-exports of roasted coffee from the ICO importing Members and the USA decreased by 0.1% to 22.54 million bags as increases in re-exports of soluble coffee offset declines in roasted coffee. The EU’s re-exports of roasted coffee decreased by 1.2% to 18.35 million bags, while those of the USA fell by 3.9% to 1.61 million bags. However, Switzerland’s re-exports of roasted coffee rose by 14.8% to 1.82 million bags. Re-exports of soluble coffee increased by 0.7% to 11.93 million bags. Soluble re-exports from the EU rose by 0.6% to 8.5 million bags, and those from the Russian Federation grew by 35.5% to 1.28 million bags. However, re-exports from the United Kingdom fell by 32.4% to 813,000 bags.
