The International Coffee Organization (ICO) composite indicator fell by 6.7% to 96.07 US cents/lb in August 2019, compared to July 2019 and by 13.6% from a high of 111.21 US cents/lb in October 2018. The daily composite indicator has averaged 100.72 US cents/lb for coffee year 2018/19 through 30 August 2019. Total exports in July 2019 amounted to 11.34 million bags, 9.5% higher than July 2018 while shipments in the first ten months of coffee year 2018/19 reached 109.41 million bags, 10.2% higher than the same period last year. Ample supplies from a 3.9% increase in global production to 169.73 million bags have fueled exports. The majority of coffee continues to be exported as green coffee, accounting for 91.3% of total coffee shipped between October 2018 and July 2019.
Global coffee demand is estimated to grow by 2.1% to 164.77 million bags, with growth in Asia and Oceania and Africa outpacing other regions. However, 2018/19 is estimated to end with a surplus of 4.96 million bags, making it the second consecutive year of surplus. The cumulative oversupply over the last two seasons is estimated at 7 million bags, which is one of the main explanatory factors for current low coffee price levels.
The ICO composite indicator averaged 96.07 US cents/lb in August 2019, dropping 6.7% from July 2019. Since the high of 111.21 US cents/lb in October 2018 at the start of the coffee year, the monthly ICO composite indicator has fallen by 13.6%. In August, the daily composite indicator ranged between a low of 94.29 US cents/lb on 19 August and a high of 97.43 US cents/lb on 8 August. Oversupply continues to burden the market, putting downward pressure on prices.
