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

 

I. & M. Smith (Pty) Ltd.

Coffee Market Report

09 Dec 2020

The International Coffee Organisation ICO have reported that the global coffee exports for the month of October were 3.19% higher than the same month last year, at a total of 9,672,000 bags. This they say, has contributed to the cumulative global coffee exports for the first ten months of the 2020 calendar year to be 3.8% lower than the same period in the previous calendar year, at a total of 107.08 million bags.

The International Coffee Organisation ICO have also come forth with their latest report to revise their forecast for global supply and demand signals, to report that against a global coffee supply of 168.55 million bags, very marginally down from their previous estimate of 168.85 million bags, for the October 2019 to September 2020 coffee year. They have released a revised lower estimate for global coffee consumption to be approximately 167.59 million bags. This would push the global coffee markets into a narrow surplus supply, which the ICO estimate to be 961,000 bags for the October 2019 to September 2020 coffee year.

The January 2021 to March 2021 contract arbitrage between the London and New York markets widened yesterday: to register this at 59.11 usc/Lb. This equates to 49.57% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday, to register these stocks at 1,298,868 bags, with 94% of these certified stocks being held in Europe at a total of 1,220,383 bags and the remaining 6% being held in the USA at a total 78,485 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 88,319 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 21,833 bags over the weeks of trade leading up to Monday 7th December, to see these stocks registered at 2,238,833 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 soft sideways track for the day. The New York Arabica Coffee market ended the day on a positive note, while the Sugar, Cocoa and London Robusta Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.2495% lower; to see this index registered 434.2125.  The day starts with the U.S. Dollar, trading at 1.338 Sterling, at 1.213 the Euro and with the US Dollar buying 5.120 Real. 

The New York and London markets started the day yesterday trading close to par on a modest positive note, both markets continued to oscillate around par for most of the morning session. As the afternoon progressed the New York market buoyed by a degree of buying support trended firmer before hitting a ceiling to limit the gains for the day, the London market followed suit in a more sedate manner. This saw the New York market settle on a modest close to par note for the day, while the London market settled on a modest softer note for the day.

The London market ended the day on a modest close to par negative note with 18.18% of the earlier losses of the day intact, while the New York market ended the day on a modest close to par positive note with 12% of the earlier gains of the day intact. This mixed close does little to indicate direction, albeit that both markets settled near to par for the day, to possibly set the markets for a hesitant steady start to early trade today, against the prices set yesterday, as follows:

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

JAN 1326 – 2                                                MAR 119.25 + 0.15
MAR   1345 – 5                                                      MAY   120.95 + 0.15
MAY   1356 – 5                                                     JUL 122.45 + 0.05
JUL   1373 – 5                                                       SEP    123.90 Unch
SEP    1390 – 5                                                       DEC     125.55 – 0.10
NOV   1406 – 5                                                      MAR    127.20 – 0.10
JAN   1421 – 5                                                       MAY   127.95 – 0.10
MAR   1436 – 5                                                       JUL   128.65 – 0.15