Comprehensive Report on Coffee Market Performance in 2024

Cofdar Platform, a leader in coffee trade, highlights the coffee market’s performance in 2024 based on data from the December 2024 Report by the International Coffee Organization (ICO). This report provides an in-depth analysis of key trends and challenges facing the global market, focusing on supply-demand dynamics, price changes, and logistical and regulatory issues.

Global Price Performance

The ICO Composite Indicator Price (I-CIP) recorded a significant increase, averaging 299.61 US cents/lb in December 2024, a 10.7% rise from November. This marks the highest monthly average since 1977, reflecting strong global demand and supply challenges.

Key Reasons for Price Increase

1. Rising Global Demand:
   • Arabica coffee saw increased demand, particularly in European and American markets.
   • The growth of specialty coffee boosted the demand for high-quality Arabica.
2. Logistical Challenges:
   • Delays in shipments due to congestion in the Suez Canal and container shortages.
   • Increased transportation costs impacted final market prices.
3. Strong US Dollar:
   • Higher operational costs for exporters led to price adjustments to cover differences.

Coffee Types Performance

1. Arabica Coffee:

• Arabica prices rose by 14.5%, reaching 326.97 US cents/lb.
• Brazil and Colombia recorded strong performances, with Arabica exports increasing by 12.2% and 8.6%, respectively.
• The growing demand for high-quality Arabica was the main driver.

2. Robusta Coffee:

• Despite a 4.7% price increase, Robusta exports dropped by 17.3%, mainly due to a 47.1% decline in Vietnam’s exports.
• Producers faced challenges related to production costs and competition from Arabica.

3. Soluble and Roasted Coffee:

• Soluble coffee exports surged by 37.9%, reflecting increased demand for instant coffee.
• Conversely, roasted coffee exports fell by 19.3%.

Geographical Analysis of Exports

1. South America:

• The region led global coffee exports, growing by 6% to 6.43 million bags.
• Brazil spearheaded this growth, with exports reaching 4.68 million bags in November 2024.

2. Africa:

• The continent experienced a 24.5% increase in exports, driven by strong performances from Ethiopia and Kenya.
• Ethiopia’s exports rose by 86.24%, reflecting recovery from previous logistical challenges.

3. Asia and Oceania:

• Exports declined by 12% due to Vietnam’s lower shipments.
• However, India and Indonesia recorded growth rates of 70.5% and 59.3%, respectively.

Key Challenges

1. Transportation Issues:

• Port congestion and container shortages led to shipping delays and higher costs.

2. Regulatory Changes:

• The upcoming EU Deforestation Regulation (EUDR) in 2025 poses compliance challenges for exporters.

3. Climate Change:

• Adverse climate conditions impacted coffee production, making supply stabilization difficult.

Future Outlook

1. Agricultural Technology Enhancement:

• Investing in technology to improve productivity and address climate challenges.

2. Market Diversification:

• Expanding into emerging markets in Africa and Asia offers significant opportunities.

3. Sustainability Focus:

• Emphasizing environmental and social sustainability will be key to accessing European markets.