Despite conflict in Europe, coffee prices continue to increase: ICO report

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Despite conflict in Europe, the International Coffee Organization’s (ICO) February 2022 market report shows that its composite indicator of coffee prices rose to 210.89 US cents per pound.

This is a 3.2 per cent month to month increase, marking 17 consecutive months of rising prices.

However, its composite indicator of coffee prices also decreased, falling by 3.7 per cent, the biggest downturn since 20 December 2021.

Additionally, in response to the outbreak of a military conflict involving Russia and Ukraine on 24 February, the average New York and London futures market prices for coffee fell by 3.1 per cent, the largest daily decrease since 30 July 2021, when it dropped by 6.9 per cent.

The ICO says in 2020, Russia and Ukraine consumed 6.26 million 60-kilogram bags of coffee, accounting for 3.8 per cent of the global consumption.

Russia supplies 20 per cent of the global seaborne ammonia market and disrupted supplies could impact the price of fertilisers, which could determine higher input costs for coffee farmers from around the world, and to higher coffee prices.

The ICO says coffee exporters are already starting to face logistical difficulties, with an exporter reported as having several containers of Honduran coffee stranded in international waters.

Furthermore, the ICO states global exports in January 2022 totalled 10.86 million bags, as compared with 10.64 million bags in January 2021.

Total exports of roasted coffee in the coffee year 2021/22 grew by 18.8 per cent, year-on-year, from 238,000 bags to 282,000 bags.

Exports from Africa in the first four months of the coffee year 2021/20 increased by 2.4 per cent to 4.04 million bags. Exports to Asia and Oceania increased by 20.7 per cent to 14.69 million bags in October 2021 to January 2022.

Compared to the first four months of the coffee year 2021/22, exports from Mexico and Central America grew by 24.1 per cent to 3.11 million, when compared with 2.50 million bags for the same period in coffee year 2020/21.

South America’s exports decreased by 16.1 per cent to 20.00 million bags in the four months of coffee year 2021/22.

For the full report, click here.

Source: GCR Mag

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