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

Despite the European Union’s conflict, the International Coffee Organization’s (ICO) February 2022 market report indicates that its composite indicator of coffee prices increased to 210.89 US cents per pound.

This represents a 3.2% month-over-month increase, marking 17 consecutive months of price increases.

However, its composite indicator of coffee prices fell by 3.7 percent, the most significant decline since 20 December 2021.

Additionally, following the outbreak of a military conflict between Russia and Ukraine on 24 February, coffee futures prices in the New York and London futures markets fell by 3.1 percent on average, the largest daily decline since 30 July 2021, when they fell by 6.9 percent.

According to the ICO, Russia and Ukraine will consume 6.26 million 60-kilogram bags of coffee in 2020, accounting for 3.8% of global consumption.

Russia supplies 20% of the world’s seaborne ammonia market, and disruptions in supply could impact fertiliser prices, resulting in higher input costs for coffee farmers worldwide and higher coffee prices.

According to the ICO, coffee exporters are already experiencing logistical difficulties, with one exporter reporting that several containers of Honduran coffee have become stranded in international waters.

Additionally, the ICO reports that global exports totalled 10.86 million bags in January 2022, up from 10.64 million bags in January 2021.

Total roasted coffee exports increased by 18.8% year on year in the coffee year 2021/22, from 238,000 to 282,000 bags.

Africa’s exports increased by 2.4 percent to 4.04 million bags in the first four months of the coffee year 2021/20. Between October 2021 and January 2022, exports to Asia and Oceania increased by 20.7 percent to 14.69 million bags.

Exports from Mexico and Central America increased by 24.1% to 3.11 million bags in the first four months of the coffee year 2021/22, compared to 2.50 million bags in the same period of the previous year.

South America’s exports fell 16.1% to 20.00 million bags during the first four months of the coffee year 2021/22.

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