Turning around and rising in global markets.

Coffee prices rose today (July 4th) in the world market. Specifically, robusta coffee prices increased by 1.89% to $2,538 per ton.

World coffee price update

According to reports, coffee prices on the world market have increased. Specifically, the online price of robusta coffee in London for September 2023 delivery was recorded at $2,538 per ton after a 1.89% increase (equivalent to $47).

Arabica coffee futures for September 2023 delivery in New York were at 160.5 US cents per pound, after rising 0.94% (equivalent to 1.5 US cents) at the time of this survey at 7:00 AM (Vietnam time).

Coffee production across Nicaragua is expected to remain relatively stable in 2023-2024 compared to the previous year, according to Daily Coffee News.

While falling fertilizer costs have provided farmers with some relief after record-high input prices due to disruptions related to COVID-19 and Russia's war in Ukraine, climate shocks, a lack of institutional support, and labor migration remain threats to Nicaragua's coffee production.

In a report, the USDA's Foreign Agricultural Service (FAS) projected Nicaragua's arabica production to remain at approximately 2.46 million 60kg bags, reflecting suboptimal fertilizer use in the coming years. Estimates may fluctuate based on El Niño conditions in the second half of 2023.

The report states: “Beyond El Niño, climate change is a growing concern for Nicaragua’s coffee industry, as extreme weather events are becoming more frequent and severe.”

The availability of coffee-harvesting labor is also expected to be a key factor in Nicaragua's production next year.

The report also points out: “Migration abroad remains far higher than historical levels – an estimated 200,000 Nicaraguans, equivalent to 4% of the population, fled in 2022 – due to the continuing deterioration of political conditions in Nicaragua. Production organizations have expressed concerns that insufficient labor supply could reduce the quality and quantity of the 2023-2024 MY harvest.”

Despite such challenges, Nicaragua has maintained a strong international reputation for high-quality arabica coffee, achieving higher prices in 2022-2023 on the market, ranging from $30 to $50 per 60kg bag above global commodity prices.

“Exporters indicate that sustained prices above US$180/60kg bag in 2023 – the average price of Nicaraguan coffee in April 2023 – could support improved farm management (primarily increased fertilization) and boost production back to levels above 2.7 million 60kg bags in 2023. MY 2024-2025,” the report states.

Notably, the FAS report indicated an “uncertain” business environment in Nicaragua due to ongoing political instability.

“On March 7, the Nicaraguan government revoked the legal status of the Council for the Private Sector (COSEP) along with 19 individual industry associations, including the Nicaraguan Coffee Exporters Association (EXCAN), which will hinder the ability of coffee exporters to cooperate and advocate as an industry.

Nicaragua lacks a comprehensive national coffee development strategy, and independent analysts note that the loss of EXCAN is due to fewer institutional pillars supporting an industry with significant growth potential across a wider range of production sectors.”

Source