Coffee prices resist…
The ICO says that, although most commodity prices were subject to a significant downward correction during the month of August, coffee prices proved somewhat more resistant to this trend, with the ICO composite indicator price only slightly down from 132.78 US cents per lb in July to 131.14 US cents per lb in August.
Said the ICO in its latest report on the market: “The firmness in coffee prices has continued in spite of the recent appreciation in the exchange rate of the US dollar compared to other important currencies. These price levels reflect the importance of market fundamentals as opposed to factors solely related to speculative movements. A tight supply/demand balance remains the dominant factor in the coffee market.”
As the report noted, in Brazil, CONAB recently published a revised estimate of the country’s production for crop year 2008/09, indicating a figure of 45.85 million bags, comprising 35.27 million bags of Arabica and 10.58 million bags of Robusta.
On this basis, Brazilian production for crop year 2008/09 will be the highest recorded since crop year 2002/03, when production totalled 48.48 million bags.
“Despite this, the combined effect of the low level of opening stocks in crop year 2008/09, the need to set aside coffee for export during the low year of the biennial cycle in 2009/10 and the producer support programme known as ‘Pepro’ are likely to restrict the flow of Brazilian exports,” said the report. “Moreover, Brazilian domestic consumption is likely to account for more than 18 million bags in 2008/09.”
“I have revised my estimate for world production in crop year 2008/09 to around 131 million bags in light of the new Brazilian estimate and other information recently received,” said the ICO’s Executive Director Dr Nestor Osorio.
Exports by all exporting Members during July totalled 8 million bags, compared to 8.5 million bags in June
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. Total exports during the first seven months of calendar year 2008 fell by 2.8 per cent compared to the same period in 2007.
Similarly, exports during the first 10 months of coffee year 2007/08 (October 2007 – July 2008) fell by 4.2 per cent compared to the figure for the same period in coffee year 2006/07, down from 82.8 million bags to 79.3 million. This decrease in the flow of exports has helped to maintain a balance between supply and demand.
As Osorio also noted, the month of August and the beginning of September were marked by the arrival of hurricanes in the Caribbean, affecting Cuba, Haiti and other countries in the region. Many casualties were reported, as well as damage to economic infrastructure, but at the time of writing, the impact on coffee plantations was still being assessed.
Source: www.siemex.biz
