The January 2011 report by the Central Coffee Organization highlights that demand continues to grow, with supply getting tighter.

Prices and movements in the coffee market are still dominated by weather problems affecting many exporting countries. As a result, coffee prices increased during the month of January, reflecting the current fragile balance between supply and demand.

The monthly average of the ICO composite indicator rose from 184.26 cents per pound in December to 197.35 cents per pound in January 2011, the highest level since September 1994. 

With regards to market fundamentals, the volume of expected 2010/11 crop production, the dynamic growth of world consumption and low levels of global inventory, continue to favor strong prices. World production for the 2010/11 period is estimated at 134.8 million bags, compared to 123.1 million bags in 2009/10, a 9.5% increase. The first official estimate of the Brazilian coffee production for 2011/12 indicates a level between 41.9 and 44.7 million bags. 

Exports of all countries amounted to 9.5 million bags during December 2010, bringing the total for the 2010 calendar year to 97.5 million bags compared to 96.2 million bags in 2009, an increase of 1.4%. It should be noted that the need to replace short-term supply has led to an increase in Brazilian exports over the last three years.