The International Coffee Organization’s (ICO) latest report, covering September 2024, reveals key developments in the global coffee market. As coffee continues to be a vital global commodity, understanding the dynamics behind its prices, export trends, and the challenges affecting supply chains remains critical for stakeholders. Here are the most important findings from the report:
1. Coffee Prices Reach New Heights
September 2024 witnessed a notable surge in coffee prices, with the ICO Composite Indicator Price (I-CIP) averaging 258.90 US cents/lb—an 8.4% increase from August 2024. This represents a 69.1% rise compared to September 2023, highlighting the continued upward trend in coffee prices. Robusta, in particular, saw the highest price appreciation, climbing 12.8% to 242.08 US cents/lb, driven by strong demand and market conditions.
The price increase can be attributed to a combination of strong consumer demand, disruptions in supply chains, and climate-related events. These disruptions, such as Typhoon Yagi’s impact on shipping routes, have compounded logistical issues, including the redirection of routes through the Cape of Good Hope due to geopolitical tensions.
2. Export Growth in Key Coffee-Producing Regions
Despite the logistical and climatic challenges, green bean exports in August 2024 surged by 8.8% compared to the previous year. This marks the tenth consecutive month of positive growth, with total green bean exports for the first 11 months of the 2023/24 coffee year reaching 113.81 million bags—up 10.5% year-on-year.
Notably, exports from Africa showed the strongest growth, up 29.5% to 1.75 million bags, driven primarily by Ethiopia, which saw a 62.4% increase in exports. Other regions, such as Asia & Oceania, also posted gains, with Indonesia and India contributing significantly to the 6.2% increase.
3. Varied Performance Across Coffee Types
The report highlights mixed performance across different types of coffee. Colombian Milds led the way with a 26.7% increase in exports, followed by Other Milds, which saw a 5.6% growth. In contrast, Brazilian Naturals experienced a slight decline of 0.2%, marking the first negative growth rate in 11 months. This downturn was primarily due to logistical delays in Brazil’s key port of Santos, despite a significant increase in exports from Ethiopia.
Meanwhile, Robusta exports surged by 14.3%, accounting for nearly 60% of the net growth in global green bean exports. Brazil, India, and Indonesia were the key contributors to this rise, highlighting the continued demand for Robusta coffee in global markets.
4. Impact of Climatic and Geopolitical Factors
Climate and geopolitical issues have had a profound impact on the global coffee trade. Extreme weather events like Typhoon Yagi, combined with ongoing geopolitical tensions, have created further disruptions in coffee supply chains. The rerouting of shipping routes due to conflicts in the Bab al-Mandab Strait has lengthened delivery times and increased costs for coffee exporters.
The report also mentions the potential for strikes in key US ports, which, though resolved quickly, added to the uncertainty in global coffee logistics during September.
5. Decline in Certified Coffee Stocks
Certified stocks of both Arabica and Robusta coffee in London and New York fell in September 2024. Robusta stocks in London dropped by 26.5%, while Arabica stocks in New York fell by 4.2%. This decline reflects the increasing pressure on supply chains and the depletion of available inventories, which may further fuel price volatility in the coming months.
Conclusion
The September 2024 ICO Coffee Market Report underscores the resilience of the global coffee market despite facing significant challenges. Rising coffee prices, robust export growth, and supply chain disruptions have shaped a dynamic and complex market. For coffee producers, traders, and industry stakeholders, navigating these challenges will be key to maintaining momentum in a sector that continues to evolve under the pressure of both market forces and external factors.
The continued rise in consumer demand, especially in key markets, highlights the need for increased investment in sustainability and innovation within the coffee supply chain to mitigate future risks. As the world’s coffee producers adapt to climate change and shifting geopolitical landscapes, the future of coffee may depend on the industry’s ability to innovate and remain resilient in the face of adversity.