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

Coffee Market Report

06 Nov 2019

The International Coffee Organisation ICO have reported that the global coffee exports for the month of September were 3.1% lower than the same month last year, at a total of 9.29 million bags. This they say, has contributed to the cumulative global coffee exports for the full twelve months of the completed October 2018 to September 2019 coffee year to be 8.1% higher than the same period in the previous coffee year, at a total of 129.43 million bags.

The same ICO report has estimated that global coffee consumption has have risen for the recently completed October 2018 to September 2019 coffee year to 165.35 million bags, which is well below what they had estimated to be the coffee supply for this completed coffee year at 169.01 million bags. However, they estimate that global coffee consumption is rising by approximately 2.1% per annum and in this respect, would indicate that global coffee consumption for the coming October 2019 to September 2020 coffee year shall be just shy of 168 million bags.

The December to January contracts arbitrage between the New York and London markets broadened yesterday; to register this at 45.06 usc/Lb. This equates to 42.59% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 6,250 bags yesterday; to register these stocks at 2,229,257 bags, with 87.3% of these certified stocks being held in Europe at a total of 1,945,545 bags and the remaining 12.7% being held in the USA at a total of 283,712 bags. There was a smaller in number increase to the number of bags pending grade to this exchange, by 4,949 bags; to register these pending grading stocks at 11,510 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 13,667 bags over the weeks of trade leading up to Monday 4th November, to see these stocks registered at 2,629,167 bags, on the day

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a modest firm sideways track for the day. The Oil, Natural Gas, Sugar, Coffee, Cotton, Copper, Orange Juice and Wheat markets ended the day on a positive note, while the Cocoa, Corn, Soybean, Gold and Silver markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.329 % higher; to see this index registered at 409.417. The day starts with the U.S. Dollar steady, trading at 1.288 to Sterling, at 1.107 to the Euro and with the US Dollar buying 3.993 Brazilian Real.

The London market started the day yesterday trading on a modest positive note, while the New York market started the day trading on a modest negative note. Both markets retained their respective stance into the early afternoon trade. As the afternoon progressed Both the London and the New York markets started to gain late in the day support to move into positive territory, settling near the highs of the day at the close.

The London market ended the day on a positive note, and with 89.2% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note, and with 89.6% of the earlier gains of the day intact. This close, with the Brazil Real showing some signs of buoyancy might inspire a follow-through confidence to set the markets up 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.

NOV 1303 + 26                                                           DEC 105.80 + 2.15
JAN 1339 + 33                                                             MAR 109.45 + 2.20
MAR 1356 + 30                                                           MAY 111.65 + 2.15
MAY 1374 + 32                                                           JUL 113.75 + 2.20
JUL 1394 + 31                                                             SEP 115.65 + 2.30
SEP 1416 + 30                                                             DEC 118.20 + 2.30
NOV 1438 + 29                                                           MAR 120.80 + 2.25
JAN 1460 + 28                                                             MAY 122.45 + 2.20
MAR 1485 + 27                                                           JUL 124.05 + 2.15