Coffee Market Report – October 2013

Coffee prices suffered further declines in October 2013, with the prices of all four group indicators sliding rapidly over the course of the month. The monthly average of the ICO composite indicator price now stands at its lowest level since March 2009, and the severe downward trend observed over the last two years shows no sign of slowing. Despite a slight decrease in September, total exports for coffee year 2012/13 reached a record volume of 110.2 million bags, comprising 68.5 million bags of Arabica and 41.7 million of Robusta. Total production in 2012/13 is also estimated at a record volume of 145.2 million bags. World consumption is estimated at 142 million bags for calendar year 2012, and growing at around 2.4% per annum.

It is too early to provide an estimate of world production in 2013/14, which is now under way in all exporting countries, but early indications suggest potential decreases in some leading exporters. Brazil is in the off‐year of its biennial cycle, and the damage from coffee leaf rust in Central America is expected to become more evident. Furthermore, it should be noted that the current low prices are likely to discourage farmers from investing and maintaining their crops, which may negatively affect future production levels.

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