I. & M. Smith (Pty) Ltd. since 1915
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I. & M. Smith (Pty) Ltd.

Coffee Market Report

12 Aug 2020

The Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of July are down by 13.8% from the previous month, to total 1,833,800 bags. This number proving to be slightly below the 2 million bags that had been initially forecast for the month’s coffee exports. The report also states that for the first seven months of 2020, Vietnam coffee exports are 1.1% lower than the same period last year at a total of 17,518,083 bags. The report well indicates the soft nature of the coffee terminal markets with coffee export revenue for the first seven months of 2020 1.5% lower than the same period last year at a total of around 1.8 billion US Dollars.

The November to December contract arbitrage between the London and New York markets narrowed yesterday; to register this at 52.95 usc/Lb. This equates to 46.61% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 20,145 bags yesterday to register these stocks at 1,417,060 bags, with 93.6% of these certified stocks being held in Europe at a total of 1,326,955 bags and the remaining 6.4% being held in the USA at a total of 90,105 bags. There is meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 0 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 10,333 bags over the weeks of trade leading up to Monday 10th. August, to see these stocks registered at 1,838,167 bags, on the day.

It was a softer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day. The Sugar market ended the day on a positive note, while the Cocoa and Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.0457% lower; to see this index registered at 396.0562. The day starts with the U.S. Dollar steady, trading at 1.303 to Sterling, at 1.172 to the Euro and with the US Dollar buying 5.382 Brazilian Real.

The London and New York markets started the day yesterday trading close to par on a modest note, the London market maintained this stance into the early afternoon trade while the New York market attracted selling pressure to drop into negative territory for the early afternoon trade. As the afternoon progressed the New York market recovered to a degree before dropping back late in the day to see the market close on a softer note for the day, while the London market attracted selling pressure to see the market trend softer towards the close.

The London market ended the day on a negative note and with 64.52% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 53.97% of the earlier losses of the day intact. This softer close does little to inspire confidence and one might think the markets are due for little better than a hesitant steady start for early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                                           NEW YORK ARABICA USc/Lb.

SEP 1383 – 8                                                                         SEP 111.35 – 1.25
NOV 1337 – 20                                                                     DEC 113.60 – 1.70
JAN 1345 – 21                                                                      MAR 115.95 – 1.60
MAR 1360 – 21                                                                    MAY 117.05 – 1.60
MAY 1376 – 20                                                                    JUL 118.05 – 1.45
JUL 1396 – 20                                                                      SEP 118.80 – 1.25
SEP 1412 – 20                                                                      DEC 119.75 – 1.15
NOV 1430 – 20                                                                    MAR 120.75 – 1.05