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

Coffee Market Report

07 Jan 2021

The National Coffee Institute of Costa Rica (ICAFE) have reported that the country’s coffee exports for the month of December were 17.50% higher than the same month last year, at a total of 41,756 bags. This they say has contributed to the cumulative coffee exports for the first three months of the October 2020 to September 2021 coffee year to be 45% higher than the same period in the previous coffee year, at a total of 88,606 bags. This marks the seventh consecutive month of growing shipments to international markets, as reported by ICAFE. Late last year the Costa Rican government made amendments to their public health laws, with reference to the Covid-19 pandemic, to allowed foreign farm workers mostly from Panama and Nicaragua to be able to enter the country during harvest time.

The March 2021 to March 2021 contract arbitrage between the London and New York markets narrowed yesterday: to register this at 59.39 usc/Lb. This equates to 49.12 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 8,975 bags yesterday, to register these stocks at 1,458,773 bags, with 94.1% of these certified stocks being held in Europe at a total of 1,373,430 bags and the remaining 5.9% being held in the USA at a total 85,343 bags. There was meanwhile a larger in number 12,515 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 100,860 bags. This marks the fourth consecutive day that the Certified washed arabica stocks held against the New York exchange were seen to increase.

The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 33,000 bags over the weeks of trade leading up to Monday 4th. January, to see these stocks registered at 2,320,500 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 0.3394% lower; to see this index registered 468.4338. The day starts with the U.S. Dollar, trading at 1.358 Sterling, at 1.231 the Euro and with the US Dollar buying 5.314 Real.

The New York and London markets started the day yesterday trading on a modest soft note, both markets continued on this path for most of the morning session, trading in modest soft territory for most of the early morning session. As the afternoon progressed the London market bounced back off the lows of the day to see the market trend very firm and set a new high for the day but this was short lived with the market soon dropping back from the highs of the day to see the market settle near to the lows of the day, while the New York market continued to drop back and also settle on a very negative note near to the lows of the day's trade.

The London market ended the day on a modest negative note with 75% of the earlier losses of the day intact, while the New York ended the day on a likewise negative note with 93.33% of the earlier losses of the day intact. This softer close does little to indicate direction, with both the New York and the London markets settling near to the lows of the day, one might think that the markets are due for little better than a follow-through hesitant start to early trade today, against the prices set on yesterday, as follows:

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

MAR 1356 – 9                                             MAR 120.90 – 4.20
MAY 1366 – 8                                             MAY 122.95 – 4.15
JUL 1379 – 8                                               JUL 124.75 – 4.15
SEP 1394 – 7                                               SEP 126.40 – 4.00
NOV 1409 – 7                                              DEC 128.25 – 3.95
JAN 1425 – 7                                               MAR 129.90 – 3.90
MAR 1440 – 8                                             MAY 130.70 – 3.80
MAY 1457 – 8                                              JUL 131.45 – 3.75