Coffee prices, reflected in the monthly International Coffee Organization (ICO) composite, found a bottom last fall and have since inched upward. Coffee futures on the Intercontinental Exchange dropped 30% in 2018.
In January the composite averaged 101.55 cents/lb with Colombian milds trading at 129.28 cents/lb.
Exports worldwide increased 8.1% to 31 million 60-kilo bags during the first three months of the 2018/19 harvest year. December shipments totaled 10.43 million bags.
Demand is high and dwindling stocks are now replenished but the surplus from a record harvest puts downward pressure on futures. Prices were 140 cents/lb in January 2017 suggesting a long recovery ahead.
Coffee is traded in dollars, easing the impact on trade with Brazil where political stability has strengthened the local currency. The Brazilian real declined a steep 26% against the dollar last year but since producers were paid in dollars, the resulting loss was only 4.1%. Efforts to stabilize prices has encouraged investors contending with a bear market that saw futures contracts fall from a recent high of 176 cents/lb in November 2016 to a 92 cents/lb low in September 2018.