Global coffee price recorded highs for the first time in ten years as the supply of the bean drops.
Since the production of Brazil coffee is affected on environmental issues and lagging logistics the price of coffee has continued to climb in several months, while the second month, which is November, of the 2021/22 coffee year, the price has continued with its highs according to the monthly price indication of International Coffee Organization (ICO).
The reporter stated that the supply of export coffee of Brazil, the biggest player on the sector, has significantly shrunk.
“Exports of all forms of coffee in October 2021 totaled 9.68 million bags (one bag being 60 kilograms), down 4.4 percent as compared to 10.13 million bags in October 2020. In terms of regional performance during the first month, which is October, of coffee year 2021/22, exports of South America decreased by 20.6 percent to 4.94 million bags as compared to 6.22 million bags in October 2020/21,” ICO said.
“Exports by Brazil decreased sharply at 23.8 percent to 3.43 million bags from 4.50 million bags in 2020/21,” it added.
ICO indicated that in November 2021, coffee prices reached new multi-year highs, as the monthly average of the ICO composite indicator price was 195.17 US cents/ lb (pound), an increase of 7.5 percent as compared to 181.57 US cents/lb in October 2021. (One pound is about 0.45 kilogram).
These price levels during coffee year 2021/22 mark a significant and steady recovery from the low levels experienced over the four preceding coffee years.
As coffee prices continued to increase, intra-day volatility in November 2021 of the ICO composite indicator price increased by 1.2 percentage points to 9.5 percent in November 2021.
The report said that despite the South American export showing reduction, other sources supply has shown increment in the month of October.
“Exports of Asia and Oceania over the first month of coffee year 2021/22 increased by 25.8 percent from 2.49 million bags to 3.13 million bags in October 2021/22. Central America and Mexico shipments during the first month of coffee year 2021/22 increased by 35.0 percent to 0.53 million bags, as compared to 0.40 million bags over the same period during coffee year 2020/21,” the monthly report explained.
Similarly Africa recorded an increase in export by 5.1 percent to 1.1 million bags in October 2021 as compared to 1.0 million bags in October 2020.
Ethiopia, origin of coffee and the biggest Arabica exporter in Africa has been reported that in the first four months of the budget year that started on July 8, the volume and the value of coffee export has climbed not only compared with the preceding year but from the projection to attain.
ICO said that since November 2020, where the ICO Composite Indicator was priced at 109.70 US cents/lb, an increase of 77.9 percent has been recorded. Moreover, the average price of November 2021 is the 10-years high since it was 193.90 US cents/lb in October 2011. The monthly average for September 2011 was 213.04 US cents/lb, “the steady upward trend observed since the start of coffee year 2020/21 shows how the recovery of coffee prices, after four consecutive years of low-price levels, reflects a dramatic change in overall market conditions.”