Coffee Market Report
| The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of March were 9,790 bags or 2.05% higher than the same month last year, at a total of 487,797 bags. Uganda Robusta exports registered a 1.41% increase when compared to the same month last year, to total 365,613 bags and Arabica exports registered a 4.01% increase when compared to the same month last year to total 122,184 bags exported in March 2023. The UCDA also reports that the cumulative exports for the first six months of the current October 2022 to September 2023 coffee year to be 97,329 bags or 3.38% lower than the same period in the previous year, at a total of 2,781,130 bags. The UCDA have reported that during the month of March, the overall value of coffee exports has been seen to have decreased by 11.72% when compared to the same month in the previous year, to total 71.54 million US Dollars.
The winter months are approaching in the southern hemisphere, and this, traditionally sees the focus of the speculative sector within the coffee markets to shift to the largest coffee producer and exporter, Brazil and the potential for the arrival of cooler weather to the vast coffee growing areas in Brazil. This coffee producer country accounts for on average 37.50% of global coffee production and some degree of dependency in world consumption terms upon this origin to produce good volumes of coffee year on year, to fuel both their own internal coffee demand as well as consumer market export demand. Thus, weather forecasts will be monitored closely by both the speculative sector and coffee industry participants, as winter months progress through August, with the potential to add further volatility to the coffee futures markets, in the short to medium term. The Brazil market will be closed tomorrow due to a public holiday, as the country celebrate Tiradentes Day. Many taking the opportunity it to make it a long weekend, which will most likely see some internal market players off the field of play for the day. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 8,264 bags yesterday, to register these stocks at 700,048 bags, with 96.37% of these certified stocks being held in, Europe at a total of 674,603 bags and the remaining 3.63% being held in the USA at a total 25,445. Of this, a total 305,020 bags, or 43.57% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 52.93% of these certified coffees, originating from Honduras. There was meanwhile a no change to the number of bags pending grading to the exchange; to register 0 bags pending grading on the day. The July 2023 to July 2023 contract arbitrage between the London and New York markets narrowed yesterday to register this at 94.32 usc/Lb. This equates to 47.12% 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 but overall firmer day on the commodity markets yesterday, with the leading in influence Oil market mostly unchanged on the day, while investors await key indicators ahead of the next US Federal Reserve Policy meeting due to be held at the beginning of May. The London Robusta Coffee, Cocoa, Corn, Soybean, Wheat, Silver, Platinum and Palladium markets ended the day on a positive note, while the New York Arabica Coffee, Sugar and Gold markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.243 Sterling, at 1.096 the Euro and with the US Dollar buying 5.075 Brazil Real. The New York market started the day yesterday trading to the south of par on a softer note, while the London market started the day yesterday in mildly firmer territory, both markets were seen to oscillate around par for the remainder of the early morning session before the New York market was weighed further by selling pressure to extend the early losses for the session, while the London market continued to carry through support to the early afternoon session. As the afternoon progressed the London market dropped back from the early highs to trend lower, both the New York and London markets hit a floor during the mid-afternoon session to limit the days losses and see the markets rebound from the lows to recover and trade back into firmer territory. The markets rallied late in the day to hit a ceiling during the late afternoon session. Both the New York and the London market encountered heavy resistance near to the highs of the day to drop back and see the New York market settle on a softer note at the close, while the London market retained some of the earlier gains to settle on a firmer note at the close. The London market ended the day on a positive note with 43.75% of the earlier gains of the intact, while the New York market ended the day on a negative note with 55.24% of the earlier losses of the day intact. This mixed but overall softer close for the markets does little to inspire confidence, with the New York market dropping back from highs of the day to settle on a negative note towards the close, 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 2468 + 26 MAY 202.55 – 2.70 |
