Global surplus and coffee flirting again with the 100-cent level on ICE U.S.
The ICO projects the world production for 2019/20 at 168.94 million bags, down 2.5% from the previous season. Arabica production reaches 96.05 million bags (down 5% from the previous season), while robusta totals 72.78 million bags (up 1.1%). World consumption fell 0.9% in 2019/20, totaling 167.59 million bags, as a result of the decline in global activity due to the pandemic.
The final result is a global surplus of 1.24 million bags. The world has accumulated a productive surplus over the past few seasons. The last deficit was in 2014/15 season, when production was 500,000 bags below consumption. This sequence of global surpluses will cause arabica prices to swing more often around the level of 100 cents on ICE U.S.
World exports fall 4.9% to 126.9 million bags in 2019/20 – ICO
In September, world exports hit 10.16 million bags, according to the ICO. This corresponds to an increase of 0.16% when compared to the same period last year. So, the 2019/20 business season ended with global shipments of 126.9 million bags, down 4.9% from the previous business cycle. The biggest proportional decline was amid other milds from Central America, whose total shipments reach only 25.15 million bags, down 9.9% from the previous season. Individual negative highlight on El Salvador and Honduras, with decreases of 35% and 19%, respectively. This very weak performance of Central American coffees explains the relative appreciation of milds and also the decline in stocks certified by ICE U.S.
While arabica exports fell 7% in the 2019/20 season, the decline in robusta shipments was only 1.4%. Brazil stands out as the main origin, accounting for 32% of global shipments. Following are Vietnam, with 21% of the total, and Colombia, with 10%. Indonesia comes in fourth place, accounting for 5%.