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


I. & M. Smith (Pty) Ltd.

Coffee Market Report

15 Oct 2020

The National Coffee Growers Federation in Colombia have since reported the September 2020 export figure to have reached 886,000 million bags, or 12.19% lower than that of the same month last year. This would see the country’s coffee exports for the October 2019 to September 2020 coffee year at a cumulative 7.75% lower than that of the same period in the previous coffee year, at a total of 12,222,000 bags.

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports at the end of 2020 calendar year are expected to reach between 12.7 million and 13.4 million bags, this number slightly below the 13.6 million bags exported during the 2019 calendar year.

The January 2021 to December 2020 contract arbitrage between the London and New York markets narrowed yesterday; to register this at 51.72 usc/Lb. This equates to 47.19% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 7,540 bags yesterday to register these stocks at 1,110,170 bags, with 93.60% of these certified stocks being held in Europe at a total of 1,036,527 bags and the remaining 6.40% being held in the USA at a total 70,643 bags. There was meanwhile a smaller in number 6,145 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 34,063 bags.

It was a modest firm 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 and London Robusta Coffee markets ended the day on a positive note, while the Cocoa and New York Arabica Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.2526% higher; to see this index registered at 418.6096.   The day starts with the U.S. Dollar steady, trading at 1.302 Sterling, at 1.175 the Euro and with the US Dollar buying 5.591 Brazilian Real.

The New York market opened the day yesterday trading on a modest soft note, while the London market started the day yesterday trading on a modest positive note, both markets oscillated around par for the rest of the morning trade. As the afternoon progressed the London market buoyed by some degree of buying support trended very positive during the afternoon session, while the New York followed suit also to trend very positive early in the afternoon session but only to hit a ceiling limiting the gains of the day to see the market drop back and settle on a modest soft note for the day.

The London market ended the day with on a positive note with 71.05% of the earlier gains of the day intact, while the New York market ended the day on a modest negative note with 55.55% of the earlier losses of the day intact. This mixed close does little to indicate direction and one might think the markets are due for little better than a hesitant steady start to early trade today, against the prices set yesterday, as follows:   

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

NOV   1250 + 27                                                                DEC    109.60 – 0.50
JAN    1276 + 26                                                               MAR   112.20 – 0.40
MAR   1286 + 23                                                               MAY   113.70 – 0.40
MAY   1300 + 21                                                               JUL    115.10 – 0.45
JUL     1318 + 22                                                                SEP    116.35 – 0.45
SEP    1336 + 21                                                               DEC   118.10 – 0.45
NOV   1355 + 21                                                              MAR   119.80 – 0.40
JAN    1371 + 21                                                               MAY   120.90 – 0.40