Understanding the Coffee Market

Definitions related to supply 

Supply is generally defined as the sum of production in a given coffee year plus stocks carried over from the previous year. 

Global coffee supply = world production in that year + opening stocks in producing countries + opening stocks in importing countries, also called inventories.
 

Exportable supply is defined as supply minus domestic consumption and an amount deemed to be required for working stocks. 
 

Working stocks are not precisely defined. They relate to the volume of coffee required to maintain a steady and planned flow of exports to the market. They are generally perceived as the amount of coffee in the pipeline in an exporting country at any one time. Harvesting and export patterns vary from country to country. As a result, working stocks are not defined as a fixed percentage or proportion of a country’s production or export capacity, but rather as an individual amount unique to every country. In many respects, the calculation of working stocks is arbitrary, but it is generally based on historical data for each country. 
 

Exportable production is total annual production less domestic consumption in producing countries. Availability for export is equivalent to the carry-over stocks from the previous year plus exportable production of the current year. Any difference between exportable production and actual exports (surplus or shortfall) results in an adjustment up or down of the carry-over stocks to the following year. 
 

Crop year. Coffee is a seasonal crop. Seasons vary from country to country, starting and finishing at different times throughout the year. This makes statistics on worldwide annual production very difficult to collate: any single 12-month period may encompass a whole crop year in one country, but will also include the tail end of the previous year’s crop and the beginning of the next year’s crop in others. To compare supply aggregates as well as supply with demand, where possible supply data have been converted from crop year to coffee year (which runs from October to September). It should be noted that this is not always possible.
 

Data concepts and variables used in the statistics of the International Coffee Organization (ICO) can be found here: http://www.ico.org/documents/cy2014-15/sc-59e-data-concepts.pdf