The International Coffee Organisation had in their earlier forecast, anticipated a global deficit in production for the October 2019 to September 2020 coffee year, of 480,000 bags. This based on an anticipated production of 168.86 million bags and a projected demand of 169.34 million bags, over the year. These figures are likely to be reassessed in the coming weeks, with concerns for the wellbeing of the coffee sector across the value chain, coming to the fore, delays in consignment movement within origin producer countries, along with anticipated lower demand side consumption in developed coffee consumer countries. The latter slowing as within the social distancing environment coffee shop culture has already experienced a direct impact in lower patron numbers and coffee shops, restaurants, hotels, other pedestrian public transport convenience stores experience closures either through enforced governing authority individual country lockdown situations, or electively necessary due to low patronage.

The news has filtered to the markets with the Brazil harvest in the Conilon robusta areas soon to begin, that social distancing programs might cause disruption to the harvesting process. These producers are however, generally well financed with access to mechanised harvesting capabilities and are most likely to continue with the harvesting season in the usual efficient manner.

Due to religious holidays being observed for the majority of the mainstream consumer markets, the London market shall be closed tomorrow and again on Monday, while the New York market shall be closed tomorrow and to trade solo and for a shortened trading day on Monday.

The July to July contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 65.10 usc/Lb.  This equates to 53.85% 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 4,312 bags yesterday; to register these stocks at 1,946,688 bags, with 90.5% of these certified stocks being held in Europe at a total of 1,762,406 bags and the remaining 9.5% being held in the USA at a total of 184,282 bags.  There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 26,413 bags. 

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 19,333 bags over the weeks of trade leading up to Monday 6th. April, to see these stocks registered at 2,378,667 bags, on the day.

The commodity markets were slightly softer in trade yesterday, to see overall macro commodity index taking a soft sideways track for the day. The Cocoa, 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 0.2771% lower; to see this index registered at 341.6303. The day starts with the U.S. Dollar steady, trading at 1.236 to Sterling, at 1.084 to the Euro and with the US Dollar buying 5.123 Brazilian Real.

The London Market started the day yesterday trading close to par on a positive note, while the New York market started the day yesterday trading close to par on a softer note. Both the London and New York markets started to attract selling pressure to move deeper into negative territory for the early afternoon trade. As the afternoon progressed both the London and New York markets attracted even more selling pressure to accentuate the losses for the day. Towards the close both markets rallied to bounce off the lows of the day and close on a modest soft note for the day.

The London market ended the day on a negative and with 27.3% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note and with 7.7% of the earlier losses of the day intact. This softer close for the markets is unlikely to inspire confidence and one would expect the markets are only due for a near to steady start to early trade today, against the prices set yesterday, as follows: 

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

JUL    1230 – 3                                                                      JUL    120.90 – 0.15
SEP    1242 – 5                                                                      SEP   122.15 – 0.20
NOV   1258 – 6                                                                      DEC   123.55 – 0.15
JAN    1275 – 6                                                                       MAR  124.80 – 0.25
MAR   1290 – 6                                                                      MAY  125.70 – 0.20  
MAY 1305 – 5                                                          JUL 126.55 – 0.20
JUL    1322 – 3                                                                        SEP    127.40 – 0.25
SEP 1341 – 3                                                            DEC 128.80 – 0.20