Coffee Market Report

The Brazil government have reported that the country’s green coffee exports for the month of January were 731,217 bags or 19.77% lower than the same month last year, at a total of 2,968,217 bags. This figure is reported versus the Brazil bumper crop that is estimated to have come in at a record 72 million bags in the July 2020 to June 2021 coffee year. When comparing the export performance from Brazil against the last, similar lower Brazil export year in 2019, the export performance is 8.99% higher against the same month in January 2019.

The National Coffee Institute of Honduras (IHCAFE) have reported preliminary data that the country’s coffee exports for the month of January were 57,390 bags or 12.33% higher than the same month last year, at a total of 522,865 bags. This they say has contributed to the cumulative coffee exports for first four months of the October 2021 to September 2022 coffee year to be 259,781 bags or 34.92% higher than the same period in the previous coffee year, at a total of 1,003,680 bags. This increase in coffee exports reflected for the month of January likely due to the past year's lockdown environment, as well as Hurricanes Eta and Iota which caused catastrophic infrastructural damage during the months of October and November last year, effects of which were reflected in the slow movement of coffee within the interior, into the beginning of 2021.

The National Coffee Institute of Honduras (IHCAFE) have maintained their estimate to report that preliminary data forecasts that during the current October 2021 to September 2022 coffee year, the country is expected to export 5,822,066 million bags, or 0.94% less than the previous coffee year.

The National Coffee Institute of Costa Rica (ICAFE) have reported that the country’s coffee exports for the month of January were 37,736 bags or 75.53% higher than the same month last year, at a total of 87,696 bags. This they say has contributed to the cumulative coffee exports for the first four months of the current October 2021 to September 2022 coffee year to be 30,907 bags or 22.30% higher than the same period in the previous coffee year, at a total of 169,501 bags.

The March 2022 to March 2022 contract arbitrage between the London and New York markets widened yesterday to register this 137.91 usc/Lb. This equates to 58.26% 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 15,126 bags yesterday, to register these stocks at 1,203,501 bags, with 95.00% of these certified stocks being held in Europe at a total of 1,143,337 bags and the remaining 5.00% being held in the USA at a total 60,164. Of this, a total 479,982 bags, or 39.88% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 51.58% of these certified coffees, originating from Honduras. There was meanwhile 10,972 bags decrease to the number of bags pending grading to the exchange; to register 36,948 bags pending grading on the day.

It was a firmer day on the commodity markets yesterday, the US Dollar lost ground against a basket of other currencies yesterday. A weaker US Dollar is seen to be a bullish factor for many of the US Dollar based commodity markets when trading in other currencies. The Sugar, Cocoa, Coffee, Corn, Soybean, Gold, Silver and Platinum markets ended the day on a firmer note, while the Oil, Wheat and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.352 Sterling, at 1.127 the Euro and with the US Dollar buying 5.266 Brazil Real.

The New York and London markets started the day yesterday trading on firmer note, both markets attracted buying support early in the day to see the markets trend in a firmer direction. The markets would continue with this upward momentum into the late morning session, with the Brazil Real tending firmer against the US Dollar. As the afternoon progressed the markets hit a ceiling to limit the gains for the day, this reversed the trend and saw the sellers return to the floor.

The New York market was seen to drop back from the highs of the day to settle on a firmer note at the close, while the London market likewise dropped back from the highs of the day to settle on a modest near to unchanged firmer note at the close.

The London market ended the day on a near to unchanged positive note with 10.34% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note with 27.83% of the earlier gains of the day intact. This firmer close, albeit that both the New York and London markets dropped back from the highs of the day, might inspire some degree of follow through confidence to possibly set the markets for a steady start to early trade today, against the prices set yesterday, as follows:

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

MAR 2178 + 3                                          MAR 236.70 + 1.60
MAY 2176 + 4                                          MAY 237.30 + 1.80
JUL 2164 + 3                                            JUL 236.30 + 1.70
SEP 2160 Unch                                         SEP 235.20 + 1.60
NOV 2156 – 4                                          DEC 233.00 + 1.35
JAN 2155 – 4                                           MAR 231.25 + 1.10
MAR 2154 – 4                                         MAY 230.15 + 1.10
MAY 2149 – 4                                         JUL 228.70 + 1.05