Coffee Market Report
The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of March was 136,000 bags or 12.95% lower than the same month last year, at a total of 914,000 bags. This has contributed to the country’s cumulative coffee exports for the first six months of the present October 2021 to September 2022 coffee year to be 1,345,000 bags or 17.73% lower than the same period in the previous coffee year, at a total of 6,238,000 bags.
The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of March were 15,000 bags or 1.31% lower than the same month last year, at a total of 1,128,000 bags. This has contributed to the country’s cumulative coffee exports for the first six months of the present October 2021 to September 2022 coffee year to be 642,000 bags or 9.03% lower than the same period in the previous coffee year, at a total of 6,469,000 bags.
The International Coffee Organisation ICO have reported that the global coffee exports for the month of February were 1.79 % higher than the same month in the previous year, at a total of 11.40 million bags. This they say, has contributed to the cumulative global coffee exports for the first five months of the October 2021 to September 2022 coffee year to be 0.75% lower than the same period in the previous year, at a total of 53.20 million bags.
The International Coffee Organisation ICO have maintained their forecast for global coffee supply at 2.10% lower than the previous year at a total of 167.20 million bags for the October 2021 to September 2022 coffee year. The International Coffee Organisation have likewise maintained their forecast for global consumption for the October 2021 to September 2022 coffee year, to increase by 3.30% from the previous year to reach a total of 170.30 million bags.
The ICO reported decrease in exports from Brazil, who have registered a 20.30% decline in exports when compared to the first five months of the previous October 2020 to September 2021 coffee year. This due to biennially bearing nature of the Brazil coffee crop and the 2021/22 coffee year, a biennial lower bearing cycle. This along with the contributory factor for the past eleven months, heightened logistical challenges for containers, vessel and space, from this key agricultural production exporter to the world.
There was an increase in exports from Asia as Vietnam, India and Indonesia cumulatively registered a 21.60% increase in exports, when compared to the same five months of the previous coffee year to total 18.67 million bags. Within the ICO report, exports for the first five months of the current October 2021 to September 2022 coffee year were seen to have decreased marginally by 0.79% year on year from Africa to a total 5.01 million bags.
The ICO report similarly includes within the total global exports, the cumulative export figures, from Mexico and the traditional washed arabica Central American bloc; Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador, to report for the first five months of the current October 2021 to September 2022 coffee year exports posted an increase of 13.40% to a total 4.58 million bags. Exports from Honduras and Guatemala the driving force behind the increase in exports form this washed arabica Central American bloc.
The May 2022 to May 2022 contract arbitrage between the London and New York markets widened yesterday to register this at 135.27 usc/Lb. This equates to 58.48% 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 1,605 bags yesterday, to register these stocks at 1,091,449 bags, with 95.11% of these certified stocks being held in Europe at a total of 1,038,115 bags and the remaining 4.89% being held in the USA at a total 53,334. Of this, a total 545,793 bags, or 50.01% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 41.24% of these certified coffees, originating from Honduras. There were meanwhile a 1,925 bags decrease to the number of bags pending grading to the exchange; to register 13,069 bags pending grading on the day.
The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 43,500 bags over the week of trade leading up to Monday 4th. April to see these stocks registered at 1,581,500 bags, on the day.
It was a mixed day on the commodity markets yesterday, as investors expect a more aggressive monetary policy from the US Federal Reserve as a tool to combat soaring inflation. The Sugar, New York Arabica Coffee, Wheat, Soybean and Corn markets ended the day on a positive note, while the Cocoa, London Robusta Coffee, Gold, Silver, Palladium and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.307 Sterling, at 1.090 the Euro and with the US Dollar buying 4.652 Brazil Real.
The New York and London markets started the day yesterday trading on a modest firmer note, both markets quickly gained momentum to see the markets trend in a firmer direction, albeit under slim volumes of trade. The markets would oscillate to either side of par before the New York market pressured by sellers in the markets dropped back and was seen to trend softer for the remainder of the morning session. As the afternoon progressed both the New York and the London markets were seen to bounce off the lows of the day and recover some of the earlier losses, this saw the New York market carry through a small degree of momentum to the close and settle on a modest firmer note, while the London market dropped back to settle on a modest softer note at the close.
The London market ended the day on a negative note with 68.18% of the earlier losses of the day intact, while the New York market ended the day on a modest positive note with 42.42% of the earlier gains of the day intact. This mixed but mostly near to unchanged note does little to indicate direction, albeit that the New York and London markets settled near to unchanged for the day one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAY 2117 – 15 MAY 231.30 + 0.70
JUL 2110 – 12 JUL 231.25 + 0.65
SEP 2103 – 13 SEP 230.45 + 0.65
NOV 2093 – 16 DEC 228.10 + 0.45
JAN 2083 – 17 MAR 225.60 + 0.20
MAR 2081 – 17 MAY 223.60 + 0.10
MAY 2078 – 17 JUL 220.85 + 0.05
JUL 2075 – 17 SEP 217.55 Unch
