Coffee prices fell to near two-year lows in December, with the benchmark composite indicator from the International Coffee Organization (ICO) averaging just 114.0 cents USD per pound for the month.
This was down 2.8% from the November average of 117.26 cents and represents the lowest per-pound figure reported by the ICO for the composite indicator in 21 months when the price registered at 111.75 cents per pound.
The month was also one of volatility, with the composite price started December at 117.30 cents per pound before dropping to 110.48 cents on December 12 and closing the year at 115.88 cents.
Though the overall drop from November was led by a fall in robusta prices, a reduction was also seen in overall arabica. Prices for the Colombian milds variety of arabica fell by 1.7% in December compared to November. Colombian milds, the most expensive variety charted by the ICO, averaged 141.62 cents per pound in December vs. 144.09 cents in November.
The ICO’s initial estimates show that global production of arabica beans, the only variety grown in Colombia, will be 1.1% lower in 2017 compared to 2016. This is led by reduced output in both Colombia and Brazil, the two largest producers.
The expectations are even lower for the overall 2017-18 crop year, which is the standard timeframe used to chart the industry.
“After increasing over the last five crop years, production in Colombia is provisionally estimated to decrease by 4.3% to 14 million bags as heavy rains caused damage during the flowering of the trees,” stated the ICO in its latest report about the 2017-18 season expectations. “In the last few crop years, Colombia’s output has expanded due to replanted coffee trees coming into production and beneficial weather.”
The latest available figures, for the period of October to November 2017, the ICO estimates shipments from Colombia to come in at 2.29 million bags, or 10.5% below the total from the same period in 2016.
Photo: Coffee roasting at Kiri Cafe in Bogotá, Colombia. (Credit: Jared Wade)