December 9

12/9 – After years of decreases, coffee prices are on the move. Coffee futures, which dropped to $.9350/lb in October, closed at $1.2370 on Friday (12/6). The International Coffee Organization (ICO) projects 2019/20 world coffee production at 167.4M bags, 0.9% below a year ago, with Arabica output down 2.7%. Given rising world coffee consumption, the ICO projects a global coffee deficit of 502,000 bags in 2019/20. World coffee exports in October were down 13.4% from a year ago. Brazilian coffee exports in November were 15.4% lower than in Nov 2018. However, 2019/20 is an off year for Brazil’s biennial coffee crop cycle and output is expected to bounce back in 2020/21. Coffee prices in 2019 will average a 14-year low near $1.00/lb vs. a 5-year average of $1.38. Barring a catastrophic weather incident, coffee prices look to remain historically cheap in 2020.