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

Coffee Market Report

03 Mar 2021

The International Coffee Organisation ICO have reported that the global coffee exports for the month of January were 3.59% lower than the same month in the previous year, at a total of 10.21 million bags. This they say, has contributed to the cumulative global coffee exports for the first four months of the October 2020 to September 2021 coffee year to be 3.70% higher than the same period in the year, at a total of 40.38 million bags.

The Ivory Coast as west Africa’s leading robusta coffee producer, have reported that their coffee exports for the month of January were 12,750 bags or 37.68% lower than the same month in the previous year, at a total of 21,083 bags. This has contributed to their country’s cumulative coffee exports for the first four months of the October 2020 to September 2021 coffee year to be 437,691 bags or 61.33% lower than the same period in the previous year, at a total of 275,934 bags.

The May-to-May contract arbitrage between the London and New York markets narrowed yesterday: to register this at 68.08 usc/Lb. This equates to 50.09% 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 1,749 bags yesterday, to register these stocks at 1,786,190 bags, with 94.6% of these certified stocks being held in Europe at a total of 1,689,435 bags and the remaining 5.4% being held in the USA at a total 96,755 bags. There was meanwhile a larger in number 4,306 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 69,162 bags.

It was a neutral 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 and Sugar market ended the day on a positive note, while the Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.27% lower; to see this index registered 495.80. The day starts with the U.S. Dollar, trading at 1.396 Sterling, at 1.209 the Euro and with the US Dollar buying 5.676 Real.

The New York market started the day yesterday trading on a modest firmer note, the market continued on this modest firm note into the early afternoon session. The London market started the day yesterday trading on a softer note, the market continued to trade on a softer note into the early afternoon session. As the afternoon progressed the New York market started to attract some degree of selling pressure to see the market set on a softer note for the day, while the London market continued to trade in negative territory. Both markets hit a floor limiting the losses for the day to see both markets settle on a negative note, respectively.

The London market ended the day on a modest negative note with 71.43% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 61.90% of the earlier losses of the day intact. This softer close, does little to inspire confidence nor does it indicate direction and one might think that 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.

MAY 1450 – 15                                         MAY 133.85 – 1.95
JUL 1470 – 13                                           JUL 135.80 – 1.95
SEP 1484 – 14                                           SEP 137.50 – 1.95
NOV 1498 – 14                                         DEC 139.10 – 1.85
JAN 1510 – 16                                          MAR 140.45 – 1.70
MAR 1526 – 16                                        MAY 141.05 – 1.70
MAY 1542 – 16                                        JUL 141.55 – 1.70
JUL 1558 – 16                                           SEP 141.95 – 1.70