Coffee prices surged higher in January, with the monthly average of the ICO composite indicator price at its highest level in four months. The recent publication of official Brazilian production estimates for crop year 2014/15, which is due to start in April, suggests that output could fall for the second consecutive crop year, giving an initial forecast of between 46.53 and 50.15 million bags. This uncertainty over the 2014/15 crop, exacerbated by notably dry weather in some coffee‐producing regions, has given support to coffee prices over the last month.
Coffee prices have fallen consistently over the course of 2013, with decreases recorded in nine out of the last twelve months. Although prices in December rose slightly compared to November, the ICO composite indicator is still at its second‐lowest level of the year, and 2013 recorded the lowest average annual price since 2009.
The ongoing deterioration of coffee prices steadied slightly in November, but the monthly averages of all the ICO indicator prices remain at multi‐year lows. The ICO composite indicator price averaged 100.99 US cents/lb, 5.6% lower than October and the lowest monthly level in six and a half years.