Global coffee prices rebound

By BUSINESS REPORTER

INTERNATIONAL coffee prices have rebounded ending nine months of slowed trading. In a July – June report authored by the international Coffee Organisation, prices of the commodity recouped a 9.5 per cent price value compared to June.

The report’s composite indicator increased to reach $159.07, the highest level in three months. This marks a significant turnaround in the trend, following nine consecutive months of falling prices.

The rebound comes after nine consecutive months of price drops, a situation that has threatened the living standards of the farmers in countries that export coffee.“The strongest growth was seen in Arabicas, fuelled by concerns over the Brazilian crop after unseasonably heavy rains at the beginning of the month,” the report reads in part.

Nevertheless, Arabica prices have relatively remained low compared to the last 12 months. The report said Robustas saw some modest growth, increasing by 1.3 per cent to reach its highest level since August 2011.

However, in terms of market fundamentals, world production in 2011/12 is estimated at 131.4 million bags, falling slightly from 134.4 million bags in 2010/11.

According to the report, world consumption, on the other hand, is estimated to have increased to 137.9 million bags in the calendar year 2011. Therefore the supply and demand balance will relatively remain tight.

World exports in June 2012 reached 9.6 million bags, 5.1 per cent higher than the same month in 2011, bringing the total for the first three quarters of the coffee year (October to June) to 81.2 million bags.

This represents a slight decrease of 0.3 percent on the previous year. Total exports from October to June over the last ten years have increased at an average annual rate of 2 per cent, while consumption has increased at a rate of 2.4 per cent.