The export revenue of coffee producers across the world has taken a hit as their average monthly earnings from shipments have declined 25% to $1.5 billion, as per report compiled by the International Coffee Organization (ICO). The significant reduction in arabica prices is having a negative effect on revenue for coffee producers. Since the beginning of 2012, monthly shipments have consistently maintained a volume of 8-10 million bags of 60 kg each, but the revenues accruing from these exports have declined from over $2 billion to around $1.5 billion.
The monthly average of the ICO composite indicator price fell to 126.96 US cents per pound in May 2013, its lowest level in over three years. This average is also 19.5% lower than that of May 2012, with decreases recorded in the last four consecutive months. The problem of lower export revenue is compounded by the fact that the cost of production has been rising in many exporting countries.
The world coffee exports reached 9.6 million bags in April, a 4.4% up on April 2012, as per the ICO data. This brings the total export for the first seven months of 2012-13 coffee year (October-September) to 66 million bags, a 7.1% increase on the 61.6 million bags exported in the same period last year.