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

 

I. & M. Smith (Pty) Ltd.

Coffee Market Report

29 Jan 2021

With the month of January coming to a close and with the shipment statistics already at hand, the Vietnam General Statistics office have estimated that the coffee exports for the month of January shall be 17.60% lower than the same month last year, at a total of approximately 2,000,000 bags. 

The General Statistics office of Vietnam have at the same time estimated that the value of the country’s coffee exports for January, shall be 12.60% lower the same month last year, at a total of approximately 217 million US Dollars.

Meanwhile, the harvest in Vietnam which was initially delayed by a continuation of the rain season into November, is coming to a close. Several internal market traders have reported that due to reduced income and therefore reduced farm inputs, the new October 2020 to September 2021 Vietnam coffee crop is expected to be 16% lower than the previous year’s crop at a total of approximately 25 million bags. It is estimated that this far farmers have sold approximately 40% of the new crop. The significant increases in ocean freight costs from this area to the world, have meanwhile come about at relatively short notice primarily being driven by an increase in finished goods demand to large consumer markets, is showing limited signs of subsiding.

The March 2021 to March 2021 contract arbitrage between the London and New York markets narrowed yesterday: to register this at 64.90 usc/Lb. This equates to 52.34% 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 1,433 bags yesterday, to register these stocks at 1,618,809 bags, with 94.4% of these certified stocks being held in Europe at a total of 1,528,574 bags and the remaining 5.6% being held in the USA at a total 90,235 bags. There was meanwhile a larger in number 16,348 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 130,732 bags.

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 Cocoa market ended the day on a positive note, while the Sugar and Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.4886% lower; to see this index registered 467.9560. The day starts with the U.S. Dollar, trading at 1.370 Sterling, at 1.209 the Euro and with the US Dollar buying 5.441 Real.

The New York and London markets started the day yesterday trading on a positive note, the markets quickly dropped back to oscillate around par for the remainder of the morning session. As the afternoon progressed both the New York and London markets attracted a degree of buying support to see the markets hit a ceiling limiting the gains for the day and to see both markets drop back from these highs and set on a softer path for the afternoon session. The New York market dropped back to see the market settle near to the lows of the day on a softer note, while the London market followed suit in a more sedate manner.

The London market ended the day on a negative note with 93.75% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 76.92% of the earlier losses of the day intact. This softer close does little to inspire confidence and with both markets settling near to the lows of the day, one might think that 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.

MAR 1303 – 15                                        MAR 124.00 – 1.50
MAY 1313 – 13                                        MAY 126.10 – 1.45
JUL 1326 – 12                                          JUL 128.00 – 1.45
SEP 1342 – 10                                          SEP 129.85 – 1.45
NOV 1359 – 9                                          DEC 131.80 – 1.50
JAN 1374 – 9                                           MAR 133.55 – 1.50
MAR 1392 – 7                                         MAY 134.30 – 1.50
MAY 1407 – 7                                          JUL 134.90 – 1.50