The World Market
Since our last report, the market has experienced alternating increases and decreases, ultimately climbing from $1.50/lb into the $1.60 range after reaching as low as $1.48/lb. Single-day price changes reached as high as five cents on two occassions, though overall volatility has remained relatively low. The current price at the time of writing ($1.60 on September 19) is up nearly 9% over last month, however this price also represents a 43 cent decrease from the 2023 high point of $2.03/lb, and a 24% decrease from this time last year.
Global Coffee Industry Statistics
Sourced from the International Coffee Organization unless otherwise noted. Read their full August 2023 Coffee Market Report here.
- The ICO Composite Indicator Price (I-CIP) averaged 154.53 US cents/lb in August, posting a median value of 152.10 US cents/lb and fluctuating between 148.79 and 163.62 US cents/lb.
- Robustas remain at a near-record high in August at 124.62 US cents/lb.
- The New York and London certified stocks were down by 3.0% and 34.6%, respectively, closing at 0.57 million 60-kg bags, whilst certified stocks of Robusta coffee reached 0.58 million, the lowest in over 20 years.
- Global green bean exports in July 2023 totalled 9.31 million bags, as compared with 9.3 million bags in the same month of the previous year, up 0.1%. bags.
- World coffee production decreased by 1.4%, year-on-year, to 168.5 million bags in coffee year 2021/22; however, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23.
- World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22. It is expected to increase by 1.7% to 178.5 million bags in coffee year 2022/23. /23.
- As a result, under the current circumstances, the world coffee market is expected to undergo another year of deficit, with an estimated shortfall of 7.3 million bags in coffee year 2022/23.
All information and statistics sourced from the USDA unless otherwise noted.
Nicaragua closed its 2022/23 harvest with approximately 3.4 million quintals of coffee exported, equal to approximately 2.6 million bags of 60 kg. This figure represents $714 million produced by the nation’s coffee sector, which employs approximately 600,000 people across the country during the harvest. The year’s harvest came in 12% below the harvest volume of the previous coffee year, largely due to restrictively high prices for fertilizer and high financing costs which limited the necessary expansion and renovation of coffee plots.
Freshly harvested coffee cherries at Santa Teresa de Mogoton in Nueva Segovia, Nicaragua.
The season also continued the trend of regained confidence in both quality and logistics for producers and exporters following the difficulties experienced in 2018/19, which saw unrest in the country and caused disruptions in production and the overall supply chain. While some feel that the process to regain the trust of importers and roasters is still ongoing, efforts like the Coffee Harvest Protection Plan are helping to ensure not only the safety of the nation’s producers, but also the security of the harvest itself.
While quality has been good this year, Nicaraguan coffee producers are still experiencing many of the same issues that we’ve noted in other Central American origins recently. Though Nicaraguan producers seemingly had fewer difficulties finding enough coffee pickers for the harvest than those in neighboring countries, our producer partner Silvio Sanchez tells us this was still an unexpected and great challenge for them in this regard. Emigration from the country is thought to be a major contributing factor to this issue; according to the USDA, an estimated 200,000 Nicaraguans left the country in 2022, a figure well above historical levels.
Beneficio Don Esteban in Matalgapa,. Nicaragua
Looking ahead, harvest projections for the 2023/24 coffee year are currently at 2.62 million bags of 60 kg, though the return of the El Niño weather system could impact these numbers. As prices for fertilizer have decreased by up to 25% after more than doubling in 2022, producers on average are applying more in 2023 resulting in an expectation of increased productivity in the 2024/25 coffee year.