The International Coffee Organization’s monthly report for May 2023 shows robusta prices reaching levels not seen since 1995. Robustas gained 5.9% from April levels, averaging 122.55 US cents/lb, as coffee drinkers swapped in these beans for costlier arabica.
The broadest index, the ICO Composite Indicator Price (I-CIP), fell 1.7% from April 2023 to an average of 175.48 US cents/lb. This indicator of global transactions in all origins fluctuated between 169.97 and 179.19 US cents/lb, posting a median value of 176.70 US cents/lb. Falling exports and underproduction in the current and prior coffee year supported prices, however, limiting the I-CIP's decline.
Excluding robustas, average prices for other groups fell in May. Colombian Milds and Other Milds slid by 3.4% and 4.1%, to 226.93 and 220.12 US cents/lb, respectively. Brazilian Naturals declined by 4.3%, to an average of 186.80 US cents/lb. ICE’s New York prices inched down by 2.2% to 183.13, while prices at London climbed by 6.8% to 112.56 US cents/lb.
Demand side factors have boosted robusta green bean prices during the past twelve months. Whereas exports of arabica fell by 6.8% during March 2022–April 2023), robusta slid by just 0.3%. Market observers believe that cost-conscious consumers are shifting their product mix to robusta away from more costly arabica to cope with a rising cost of living. This affects the mix of beans used in instant, roasted and ready-to-drink coffee.
Inflation in the euro area, for example, rose to an average of 8.8% for March 2022-April 2023, up sharply from 4.4% during March 2021–April 2022, as indicated by the Harmonized Index of Consumer Prices (HICP) Interest rates too have climbed, after the US Federal Reserve hiked its benchmark rate to between 5% and 5.25% in May, compared to rates near zero in March 2022,
Read the report at: https://www.ico.org/prices/p1-May2022.pdf