Coffee prices surged higher in May 2021 showing signs of progressive recovery ......

4 June 2021

In May 2021, the ICO composite indicator rose by 10.4% to 134.78 US cents/lb, the highest monthly average since the level of 137.68 US Cents/lb registered in February 2017. A firm upward trend of coffee prices over the first eight months of coffee year 2020/21 seems to confirm a net recovery from the low price levels that began in coffee year 2017/18. The price performance has been driven by an expected reduction in production in key exporting countries like Brazil for the 2021/22 season. Moreover, the brighter prospects for demand as the covid-19 pandemic-related lockdown measures are being removed in major consuming markets with the covid-19 vaccine programmes is generating greater confidence of consumers in an economic recovery and return to normal. Prices of all four groups of coffee have recorded a substantial increase, particularly the groups of Arabica coffee. In terms of market fundamentals, shipments by exporting countries to all destinations totalled 11.40 million 60-kg bags in April 2021, compared with 11.29 million bags in April 2020. As a result, total exports over the first 7 months of coffee year 2020/21 amounted to 77.52 million bags compared to 74.49 million bags over the same period in coffee year 2019/20. Cumulative exports from May 2020 to April 2021 are estimated at 130.40 million bags, a small decrease of 0.48% compared with the 130.97 million bags recorded from May 2019 to April 2020. World consumption for coffee year 2020/21 is projected at 167.58 million bags, an increase of 1.9% on its level of 164.43 million bags in coffee year 2019/20. Total production for coffee year 2020/21 is estimated at 169.60 million bags, representing a 0.4% increase on 168.94 million bags in coffee year 2019/20. Although world consumption is increasing, it remains 1.2% below world production. However, with prospects of lower production in Brazil for coffee year 2021/22 and the reductions in other countries, world consumption is likely to exceed world production in coffee year 2021/22.
Find out more in the ICO's latest Coffee Market Report>>