February saw the downward trend in the coffee market over the last few months continue, the International Coffee Organization (ICO) reported in its monthly Coffee Market Report.
The ICO composite daily price dropped to a low of just under $1.30, more than 50 cents less than its most recent peak of 185.09 in October 2014.
Despite this downward pressure on prices, world production is expected to come to 142 million bags in crop year 2014/15, 4.6 million less than 2013/14 and its lowest level in three years.
This puts the coffee market into a deficit for the current year, although stocks in exporting countries have so far allowed exports to continue at a strong pace.
The coffee market fell sharply in February, as improved weather in Brazil contributed to heavy selling pressure.
The daily price of the ICO composite dropped from a high of 148.25 cents/lb to a low of 128.75 cents, its lowest level since mid-February 2014.
Total production in crop year 2014/15 is now estimated at 142 million bags, 3.2% less than 2013/14. This is slightly higher than the previous estimate, due to increased production expected in Honduras (revised up to 5.4 million), and slight upward adjustments in Tanzania (to 1 million), Cameroon (475,000), Rwanda (280,000) and Burundi (250,000).
Production in India, on the other hand, has been revised down slightly to 5.5 million bags, according to the post-monsoon estimate of the Coffee Board of India, and Mexico has also been adjusted slightly lower to 3.9 million bags. Output in Brazil, Vietnam, Colombia and Indonesia has been maintained at the same level.
As a result, world coffee production is likely to be some 4.6 million bags lower compared to 2013/14, with both Arabica and Robusta estimated lower, by 2.8% and 3.7% respectively.
