[information] the global coffee market continues to be under pressure on the price estimate of coffee surplus for two years.

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The International Coffee Organization (International Coffee Organization, ICO) said in its monthly report that the global coffee market is expected to show oversupply for the second year in a row in 2018, but the surplus is smaller than that of the previous year. The report expects the global coffee market to have a surplus of 2.29 million packets (60 kg each) this year, about 1 million packets less than the surplus of the previous year, of which global coffee production is estimated to be 167.47 million packets and consumption is estimated to be 165.18 million packets.

The report said a glut in the coffee market continued to put pressure on coffee prices, with the monthly average price of the ICO Composite Coffee Index falling from 109.59 cents per pound in November 2018 to 100.61 cents per pound in December 2018.

In November 2018, global coffee exports rose 5.7 per cent to 9.88 million bales from 9.35 million bales in the same period last year, but down 7.3 per cent from 10.67 million bales the previous month. In the first two months (October-November) of the current coffee year since October last year, exports of Arabica coffee increased by 13.2% to 13.84 million packets per year, and Robusta coffee exports increased by 18.1% to 7.1 million packets per year. Last year (2017 / 18), global coffee production increased from 1.5 million to 164.99 million bales.

This year, global Arabica coffee production is expected to increase by 2.5% to 104.01 million packets per year, while Robusta coffee production is expected to decrease by 0.1% to 63.5 million packets per year. Among the regions, coffee production in South America is expected to increase by 4.3 per cent to 79.94 million packets per year, coffee production in Africa is expected to increase by 1.8 per cent to 17.8 million packets per year, coffee production in Asia and Oceania is expected to decrease by 2.1 per cent to 48.01 million packets per year, and coffee production in Mexico and Central America is expected to decrease by 0.5 per cent to 21.72 million packets per year.

Brazil will remain the world's largest coffee producer. Brazilian coffee production is expected to be 58.5 million bales in 2019 from April, compared with the fact that the Brazilian Ministry of Agriculture has just raised its forecast for Brazilian coffee production in 2018 by 1.2 million to 61.7 million bales. Due to the difference in crop years between the northern and southern hemispheres, ICO's estimates of global coffee production in 2018 and 1920 include parts of Brazilian coffee in 2018 and 2019 respectively.

Between April and November 2018, Brazilian coffee exports rose 18 percent to 23.39 million bales a year, the highest level in the past decade, and in line with figures from the Brazilian Ministry of Agriculture to raise its coffee production forecast.

Coffee production in Vietnam, the second largest coffee producer, is expected to fall by 3.4 per cent to 29.5 million bales per year in 2018, mainly due to adverse weather damage per unit yield, but the expected increase in acreage offset some of the impact. In 2017, the output of coffee in Vietnam increased from 1.04 million to 30.54 million packets, while the export volume increased by 21.7% to 28.64 million packets. Vietnam's coffee exports increased by 32.7% to 4.1 million bales in the first two months of this year, partly due to the impact of accumulated inventory shipments in the previous year.

In 2018, Colombian coffee production is estimated to have increased by 2.7% to 14.2 million bales compared with 13.82 million bales in the previous year, mainly due to the decline in per unit yield caused by rainy weather last year. Colombian coffee exports rose slightly to 2.3 million bales in the first two months of the year, up from 2.28 million bales in the same period last year, with November's coffee exports rising 6.7 per cent to 1.24 million bales.

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