The price of coffee has fallen by 7.4 per cent, taking it to its lowest since 2009 throughout June 2013. Although the market remains well supplied with coffee, the total exports for the first eight months of the coffee year, which falls between the months of October and May, dropped by almost 2 million bags.
The International Coffee Organisation’s (ICO) report states that given current price trends there is less of an inventive for farmers to invest in their crops, especially with labour, equipment and fertiliser prices rising.
According to the ICO, this fall in commodity prices is a reflection of the general economic decline, but is mostly contributed to the negative economic news from China and the United States.
Even though prices are falling, production rates are on the rise. With current estimations of total crop production up by 7.8 per cent from 2011-2012 at 144.6 million bags in this 2012-2013 period, production is expected to further increase in Africa by a whopping 16.6 per cent, bringing this figure up to 18.3 million bags, with Ethiopia and Tanzania leading the pack
Production in Central America has been severely impacted by coffee leaf rust, and has caused an estimated US$500 million worth of damage.