Coffee Market Report
With the month of February almost complete and with the shipment statistics already at hand, the Vietnam General Statistics office have estimated that the coffee exports for the month of February will be 28.70% higher than the same month last year, at a total of approximately 3,000,000 bags. The comparatively higher export performance month on month February can be attributed to the low period of activity last year, due to Tet Lunar New Year, which was observed in February 2022, versus Tet Lunar New Year this calendar year, observed in January 2023.
The February 2023 export performance is anticipated to result in the countries coffee exports for the first five months of the current October 2022 to September 2023 coffee year to be 10.78% higher than the same period last year, at a total of 11,166,666 bags. The General Statistics office of Vietnam have at the same time estimated that the value of the country’s coffee exports for the month of February 2023, shall be 29.28% higher than the same period last year, at a total of approximately 393 million US Dollars.
The Indonesian government trade data from Sumatra, the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of January were 11,301 bags or 4.32% lower than the same month last year, at a total of 250,103 bags. This contributes to the islands cumulative robusta coffee exports for the first ten months of the current April 2022 to March 2023 coffee year to be 904,292 bags or 30.25% higher than the same period in the previous year, at a total of 3,893,602 bags.
The latest Commitment of Traders report from the New York arabica coffee market; that is being released by the CFTC in sequence of week by week reports, following data corruption that has since been resolved; has seen the shorter term in nature Managed Money fund sector decrease their net short position by 66.24% within this market over the week of trade leading up to Tuesday 31st. January 2023; to register a new net short position at 12,420 Lots. The longer term in nature Index Fund sector of this market increased their net long position by 17.17% within the market, to register a new net long position of 51,408 Lots on the day.
Over the same week, the Non-Commercial Speculative cut their net short position by 49.81% within the market over the week of trade leading to Tuesday 31st. January 2023: to register a net short position of 20,088 lots, which is the equivalent of 5,694,858 bags. This net short position has most likely been decreased further and possibly switched to a new net long position through the period of overall firmer trade that has followed.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 5,562 bags yesterday, to register these stocks at 794,575 bags, with 95.10% of these certified stocks being held in, Europe at a total of 755,659 bags and the remaining 4.90% being held in the USA at a total 38,916. Of this, a total 396,822 bags, or 49.94% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 46.80% of these certified coffees, originating from Honduras. There was meanwhile a 640 bags increase to the number of bags pending grading to the exchange; to register 11,052 bags pending grading on the day.
The May 2023 to May 2023 contract arbitrage between the London and New York markets narrowed yesterday to register this at 89.70 usc/Lb. This equates to 48.11% price discount for the London Robusta coffee market. This wide arbitrage may be viewed by price sensitive roasters as an attractive alternative discount for Robusta against the comparatively higher value arabica coffee.
It was a mixed day on the commodity markets yesterday, as the US Dollar fell back from recent highs, but was kept in check by higher-than-expected US inflation data which may provide speculative guidance and further interest rate hikes to come. The Cocoa, Sugar, Gold, Platinum and Palladium markets ended the day on a firmer note, while the Coffee, Corn, Soybean, Wheat and Silver markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.204 Sterling, at 1.058 the Euro and with the US Dollar buying 5.201 Brazil Real.
The New York market started the day yesterday trading to the north of par on a modest firmer note, while the London market started the day trading on a softer note. Both the New York and the London markets attracted selling pressure early to trend in a softer direction, this was however short lived as the markets rebounded from the early lows, to find support and trend back towards par during the mid-morning session. As the afternoon progressed the markets encountered resistance to fall back and hit a floor for the day. The New York and London markets found support near to the day’s lows to rebound and recover some of the losses. The New York market was seen to settle on a softer note at the close, while the London market followed suit in a more sedate manner to likewise settle on a softer note at the close.
The London market ended the day on a negative note with 47.36% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 37.88% of the earlier losses of the day intact. This follow through softer close for the markets, does little to indicate direction albeit that the markets recovered some of the earlier losses, one might think that the markets will be pressured for a follow through hesitant start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAY 2133 – 18 MAY 186.45 – 1.25
JUL 2121 – 16 JUL 184.90 – 1.10
SEP 2099 – 15 SEP 182.75 – 1.00
NOV 2067 – 15 DEC 180.70 – 0.95
JAN 2049 – 15 MAR 180.30 – 1.00
MAR 2043 – 15 MAY 180.70 – 1.05
MAY 2043 – 16 JUL 180.85 – 1.00
JUL 2049 – 16 SEP 181.00 – 1.00
