International coffee prices rocket upward as a result of weather problems in several countries
The recently released Coffee Market Report lays out all the details
There's good reason to expect a price increase for a cup of morning java.
That's because prices of all four groups of coffee have gone up substantially since October 2020, according to the International Coffee Organization. It was created in 1963 under the auspices of the United Nations.
In its recently released Coffee Market Report, the organization stated that the monthly average of the ICO composite indicator is up 43.8 percent since last October, which marks the start of the coffee year.
"This upward trend of coffee prices over the first 10 months of coffee year 2020/21 seems to confirm a net recovery from the low-price levels that have dominated the world market since coffee year 2017/18," the ICO stated.
Columbian Milds reached US$2.186 per pound in July, up from US$1.0366 recorded in July 2020.
Meanwhile, Brazilian Naturals were at US$1.6062 per pound, up from US$0.9796 in July 2020. The price of Robusta rose 39.6 percent over the same period to reach US$0.9839 per pound.
One of the most intense frosts in Brazil's recent history is one of the contributing factors.
"Its production for crop year 2021/22, which started last April, had already been expected to fall significantly, since this is the off year in the production cycle of Arabica coffee," the ICO states. "On top of this, the recent frost is expected to destroy a substantial number of trees, with negative effects on production expected from crop year 2022/23 onwards."
The report also mentions "climate-related shocks" likely contributing to a 2.1-percent decrease in production in Central Americo and Mexico.
Exports have fallen 3.5 percent from African in the first nine months of the 2020-21 coffee year. Some countries—such as Uganda, Tanzania, and Kenya—posted large increases, but those were more than offset by sharp declines elsewhere, most notably in Ethiopia (-19.5 percent) and Côte d’Ivoire (-47.4 percent).
The International Coffee Organization is based in London, England, and administers the International Coffee Agreement, which came into force in 1962 and has been extended and revised several times since. It has 49 coffee-producing states as members and seven importing members.
The Trump administration pulled the U.S. out of the International Coffee Agreement in 2019. Canada does not belong to the organization.