Prices of Colombian mild coffee beans returned above $3 a pound last month, for only the second time in 11 years, as poor weather continued to crimp output from the key arabica-growing country.
The overall price of coffee, as measured by an International Coffee Organization index, rose by 4.5% to 202.46 cents a pound in June, taking year-on-year gains to 44%.
Arabica prices proved particularly buoyant, with Colombian mild beans adding 4.5% to 301.57 cents a pound, representing only the second time since 2011 that they have crossed above 300 cents.
The first was in February, when they reached 306.36 cents a pound, although still falling short of a high of 312.95 cents a pound reached in April 11, on ICO data.
‘Persistent unfavourable weather’
The price gains came for a month in which output from Colombia itself – by far the biggest producer of Colombian milk beans, which are also grown in Kenya and Tanzania – fell by 9.6% to 951,000 bags, the lowest June figure in eight years, according to the Federación Nacional de Cafeteros growers’ group.
Output for the first half of 2022, at 5.43m bags, was the lowest since 2013, reflecting excessive wetness which many observers link to La Nina.
The ICO noted “persistent unfavourable weather conditions which have reduced the available supply of coffee in the country”.
While the ICO also reported a 149% year-on-year surge to 1.0m bags in exports of Colombian mild coffee for May, this was attributed to comparison with a 2021 period marked by widespread protests in the South American country against increased taxes, corruption, and healthcare reform.
“The sharp increase in the growth of the Colombian milds is technical, reflecting the 56% drop in exports in May 2021, which in turn was due largely to social unrest throughout Colombia,” said the ICO.
The 400,000 bags of Colombian milds exported in May last year was the lowest figure for any month since August 1977.
Last month’s gain in the price of Colombian mild beans expanded their premiums over other types of coffee.
The premium over “other mild” beans, as grown in the likes of Central America, Peru and India, rose by 7.1% month on month to 27.88 cents a pound, and against Brazilian natural arabica beans by 3.7% to 71.17 cents a pound.
These gaps were the biggest since at least 2010, as was the premium of 197.76 cents a pound that Colombian milds gained over robusta coffee, up 7.9% month on month.