The International Coffee Organization (ICO) has released its Coffee Market Report for July 2024, revealing significant developments in global coffee prices and market dynamics.
Surge in Coffee Prices
The ICO Composite Indicator Price (I-CIP) for July 2024 reached an average of 236.54 US cents per pound, marking a 4.3% increase from June 2024. This rise in prices is evident across various coffee groups:
- Colombian Milds: Increased by 3.0% to 257.82 US cents per pound.
- Other Milds: Rose by 3.5% to 257.10 US cents per pound.
- Robustas: Showed the strongest growth at 5.1%, averaging 214.72 US cents per pound.
- Brazilian Naturals: Appreciated by 4.6% to 239.70 US cents per pound.
The report also noted a contraction in the Colombian Milds–Other Milds differential to 0.72 US cents per pound and a 6.7% reduction in the arbitrage between the London and New York futures markets, bringing it down to 40.69 US cents per pound.
Market Volatility and Stock Levels
The intra-day volatility of the I-CIP decreased by 0.9 percentage points, averaging 11.4% in July. Meanwhile, certified stocks showed modest growth:
- London certified stocks: Expanded by 1.7%, reaching 0.99 million bags.
- Arabica coffee certified stocks: Increased by 0.9% to 0.87 million 60-kg bags.
Export Trends by Coffee Groups
Global exports of green coffee beans presented mixed results:
- Colombian Milds: Jumped by 26.0% to 1.04 million bags in June 2024.
- Other Milds: Increased by 2.4% to 2.34 million bags.
- Brazilian Naturals: Climbed by 22.3% to 3.1 million bags.
- Robustas: Declined by 12.7% to 3.3 million bags.
Regional Export Performance
Export performance varied significantly across regions:
- Asia & Oceania: Dropped by 33.0% to 2.43 million bags.
- Africa: Rose by 31.6% to 1.75 million bags.
- South America: Grew by 34.7% to 4.85 million bags.
- Mexico & Central America: Fell by 4.2% to 1.76 million bags.
Coffee Forms Export Data
- Soluble Coffee: Exports increased by 6.5% to 0.94 million bags.
- Roasted Beans: Exports decreased by 24.4% to 59,467 bags.
Influencing Factors
The report highlighted key factors influencing the coffee market:
- Price Trends: The I-CIP followed a bell curve pattern, peaking at 251.68 US cents per pound on July 9. A small surplus of 1 million bags and a decade-long negative production balance applied upward pressure on prices.
- Interest Rates Impact: Prospective cuts in interest rates and dissipating frost in Brazil’s main coffee-producing regions helped ease the I-CIP towards the end of the month.
- Stockholding Costs: High interest rates increased the cost of holding stocks, prompting traders and roasters to buy coffee on shorter-term contracts, thus boosting market activity and short-term demand.
Production and Consumption Outlook
The ICO estimates global coffee production for the 2023/24 coffee year at 178.0 million bags, a 5.8% increase from the previous year. Arabica production is projected to rise by 8.8% to 102.2 million bags, while Robusta production is expected to grow by 2.1% to 75.8 million bags. Global coffee consumption is anticipated to increase by 2.2% to 177.0 million bags in 2023/24.
The July 2024 Coffee Market Report by the International Coffee Organization underscores the robust growth in global coffee prices and highlights key market dynamics, offering valuable insights for stakeholders in the coffee industry.