Coffee prices fell last month for the first time since October 2020 as exchange stocks recovered, amid some signs of an easing up in the logistical difficulties which have exacerbated a squeeze on supplies.

Coffee prices as measured by an International Coffee Organization indicator fell in March by 7.6% to 194.78 cents a pound, the intergovernmental group said.

The decline, to a five-month low, represented the first drop in 17 months – and ended a winning streak which saw values double and hit their highest in more than a decade.

‘Lost value’

“Every group of coffee lost value relative to the previous month,” the ICO said, with all five of its bean classes depreciating.

However, the data showed Brazilian natural arabica beans “presenting the highest reduction” in price, of 9.4% month on month, to 222.03 cents a pound.

The ICO highlighted that the price declines came as stocks held for delivery against exchange inventories “reversed the previous drawing down trend”, expanding on a combined basis for the first time in 10 months.

Inventory rebuild

The increase was particularly marked for New York arabica coffee, in which stocks “gained 13.9%” to end March at 1.08m bags – up from a multi-year low of 980,562 bags touched in late February.

And it was led by Brazilian natural beans, in which stocks held for delivery against New York futures swelled by 37% during March to 539,073 bags.

Stocks from all other origins held steady or declined. Inventories of Honduran beans, historically the top origin held in exchange stores, shrank by 10.3% month on month to 445,460 bags.

Logistical hiccups

The rebuild in inventories of Brazilian natural beans comes amid some evidence of an improvement in the logistical difficulties which, combined with production disappointments, constrained supplies from the top coffee exporting country.

While the ICO noted that Brazil in February still faced “continuing issues with availability of containers and shipping capacity”, Cecafe, the exporters’ association, noted in a briefing last month that there had been “an improvement in the logistics scenario” – if with the situation still “far from normal”.

The ICO highlighted too a dip in Colombian exports  of 23% to 991,000 bags in February, “linked to persistent unfavourable weather conditions reducing the available supply of coffee”.

Prices of Colombian mild arabica beans fell by a more modest 6.7% last month to 285.81 cents a pound.

That allowed their premium over Brazilian naturals to expand to 63.78 cents a pound, the biggest gap on data going back to 2011.