Coffee Market Report

The National Coffee Growers Federation in Colombia have reported that the country’s coffee exports for the month of June were 137,000 bags or 12.20% lower than the same month last year, at a total of 986,000 bags. This due to the national strike which had impacted the flow of coffee from the interior, as road blockades around the country are inhibited exporters from delivering coffee to the ports. This has contributed to the country’s cumulative coffee exports for the first nine months of the present October 2020 to September 2021 coffee year to be 165,000 bags or 1.75% higher than the same period in the previous coffee year, at a total of 9,579,000 bags.

The National Coffee Growers Federation in Colombia have not reported the country’s coffee production figures for the month of June, due to the unusual circumstances surrounding the national social unrest and protests, the protests have however, subsequently subsided, with the flow of coffee from the interior, having been reported to have improved substantially when compared to the previous weeks.

The London robusta market continues to register an inverted structure, with discounts rather than the traditional structure of premiums that would apply for the forward delivery months, from November 2021 through to November 2023 against the September 2021 delivery month.

The September-to-September contract arbitrage between the London and New York markets widened yesterday to register this at 72.75 usc/Lb. This equates to 48.52% price discount for the London Robusta coffee market. This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 9,646 bags yesterday, to register these stocks at 2,160,878 bags, with 93.56% of these certified stocks being held in Europe at a total of 2,021,718 bags and the remaining 6.44% being held in the USA at a total 139,160 bags. Of this, a total 1,151,066 bags, or 53.27% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.90% of these certified coffees, originating from Honduras. There was meanwhile 9,646 bags increase to the number of bags pending grading to the exchange; to register these pending grading stocks at 45,095 bags.

It was a mixed day on the commodity markets yesterday, with indicators from the US Federal Reserve’s June meeting implying that economic recovery in the world’s largest economy is at a slower pace than initially targeted. The Coffee, Soybean, Gold, Silver and Palladium markets ended the day on a positive note, while the Sugar, Cocoa, Corn, Wheat and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.378 Sterling, at 1.179 the Euro and with the US Dollar buying 5.232 Brazil Real.

The New York market started the day yesterday trading on a firm note, while the London market started the day yesterday trading on a softer note. The New York market quickly gained momentum early in the day to see the market buoyed by buying support. The London markets fortunes reversed and followed the path of the New York market early in the day to be set on a positive track for the remainder of the session. As the afternoon progressed the markets continued to trend north of par, this saw both markets hit a ceiling during the early afternoon session, limiting the gains for the day. Both the New York and the London markets dropped back from the highs of the day to settle on a firmer note at the close.

The London market ended the day on a positive note and with 63.89% of the gains of the day intact, while the New York market ended the day on a likewise positive note and with 44.05% of the gains of the day intact. This firmer might close might inspire some degree of follow through confidence for the markets, albeit that both the New York and the London market dropped back from the highs of the day, one might therefore think that the markets are due for a hesitant steady start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                              NEW YORK USC/LB.

SEP 1702 + 23                                                         SEP 149.95 + 1.85
NOV 1694 + 16                                                       DEC 152.95 + 1.85
JAN 1688 + 17                                                        MAR 155.60 + 1.90
MAR 1676 + 16                                                      MAY 156.95 + 1.95
MAY 1669 + 12                                                      JUL 158.05 + 2.00
JUL 1674 + 11                                                        SEP 158.90 + 2.05
SEP 1685 + 12                                                        DEC 159.95 + 2.10
NOV 1695 + 12                                                      MAR 161.05 + 2.20