World shipments fall 5.3%, and milds are highly valued
The ICO estimates global coffee production at 169.34 million bags, considering the 19/20 business cycle, which starts in October and ends in September. This corresponds to a drop of 2.2% in comparison with the previous season, when production reached 173.10 million bags. Arabica production is estimated at 95.99 million (-5%) and robust in 73.35 million bags (+ 1.9%). World consumption is projected at 168.39 million bags on 19/20, against 167.84 bags on 18/19. Advance of just 0.3%. Thus, the ICO projects a global surplus of 952 thousand bags in 19/20, after a surplus of 5.26 million bags in the 18/19 season.
Worldwide shipments reached 10.61 million bags in July, down 11% from the same period last year. Between Oct/2019 and Jly/2020, world shipments total 106.59 million bags, down 5.3% from the same period last season, when they hit 112.58 million bags. Negative highlight on Central America (other milds), whose export volume fell by 9.7% in the period, totaling only 21.6 million bags. Shipments of Colombian milds fell by 6.6%, and Brazilian naturals by 5.8%. The decline in robusta hit 2%.
In general, the flow of milds suffered a greater impact, which resulted in firmer differentials in the world market. Lower availability and aggressive demand ended up supporting Colombian mild prices, which in July reached 58.37 cents above the second position on ICE Futures U.S. However, in view of the recent rally on ICE, differentials dropped to 44.53 cents. Yet, it remains quite high. Central American milds were trading at +51.44 cents against ICE Futures U.S. in July, falling to +42.20 cents now in September.