World coffee production
• 142 million bags in 2014/15 (estimated)
• 3.2% less than 2013/14
• Arabicas ↘ 2.8% • Robustas ↘ 3.7%
0
20
40
60
80
100
120
140
160
2011 2012 2013 2014*
Mill
ion
bags
Arabicas Robustas
Production % change in major exporting countries
2014 Brazil 45.3 Vietnam 27.5 Colombia 12.5 Indonesia 9.0 Ethiopia 6.6 India 5.5 Honduras 5.4 Mexico 3.9 Uganda 3.8 Guatemala 3.5 Peru 3.4
-7.8%0.0%
3.1%-23.0%
1.5%8.7%18.2%
-0.4%5.5%10.8%-21.6%
0 10 20 30 40 50
BrazilVietnamColombiaIndonesiaEthiopiaIndia
HondurasMexicoUganda
GuatemalaPeru
Million bags
2013
2014
Production in Brazil
• First estimate of 2015/16 production (Source: Conab)
• Between 44.1 and 46.6 million bags
• Roughly unchanged on 2014/15
43.5
50.8 49.245.3 45.4
0
10
20
30
40
50
60
2011/12 2013/14 2015/16*
Mill
ion
bags
Arabica Robusta* Estimated
Consumption: Provisional estimate for 2014
• Expecting a 1.8% increase to 149 million bags
• Still strong demand in many countries, particularly traditional markets
• But biggest potential is emerging markets and exporting countries 0
20
40
60
80
100
120
140
160
Mill
ion
bags Emerging
markets
Exporting countries
Traditional markets
Focus on traditional markets
• Overall growth in traditional markets: 1.6% per annum since 2011 – EU: +0.8%
– USA: +2.5%
– Japan: +2.4%
– Canada: +3.1% (NB Provisional data)
0
10
20
30
40
50
Mill
ion
bags
2011201220132014
120
130
140
150
160
170
180
190
US
cent
s/lb
Daily prices: Last six months (ICO composite indicator)
185.09
128.75
ICO Group prices: Last two years
50
100
150
200
250
US
cent
s/lb
Colombian MildsOther MildsBrazilian NaturalsRobustas
Price volatility and Arabica/Robusta arbitrage
20
40
60
80
100
120
140
US
cent
s/lb
Arbitrage
0%
5%
10%
15%
Vola
tility
(%)
Volatility
7
8
9
10
11
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Mill
ion
bags
2011: 104.1 million
2012: 110.6 million
2013: 111.1 million
2014: 112.0 million
Monthly exports: 2011 - 2014
Record Exports
Depreciation in exchange rates (Against US$)
90
100
110
120
130
140
150
Inde
x (M
arch
201
3 =
100)
Brazil
Colombia
Indonesia
70
80
90
100
110
120
Inde
x (0
1-O
ct-1
4 =
100)
Brazilian R$ US$
Coffee in US$ and Brazilian R$ (ICO composite indicator)
-11%
-24%
Inverse relationship between stocks and prices
• World stocks and international prices tend to have an inverse relationship
• Given the lower production levels in 2014/15, it is expected that stocks will be used to supply the market
• This would normally result in higher prices
0
50
100
150
200
0
20
40
60
80
Pric
es (U
S ce
nts/
lb)
Stoc
ks (m
illio
n ba
gs)
World stocks ICO indicator price
Inventories in importing countries
0
5
10
15
20
25
Mar
Jun
Sep Dec Mar
Jun
Sep Dec Mar
Jun
Sep Dec Mar
Jun
Sep Dec Mar
Jun
Sep Dec
2010 2011 2012 2013 2014
Mill
ion
bags
OthersJapanUSAEU