Coffee Market Report
The Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of March have registered 17.70% higher from the previous month, at 3,149,533 bags. This number proving to be lower than initial estimate by the Vietnam Customs Authority for the month's coffee exports. The cumulative export performance for the first six months of the current October 2023 to September 2024 coffee year in Vietnam that is the largest producer of robusta coffee, is reported to be 4,883 bags or 0.31% marginally higher than the same period in the previous year, at a total 15,914,283 bags.
The Coffee Exporters Association in Brazil Cecafé have reported that the countries green coffee exports for the month of March were 40.90% higher than the same month last year, to total 3.95 million bags, this number made up of 3.10 million bags of arabica coffee up 15.10% from the same month last year and 846,735 bags of Conillon robusta coffee up 689.40% from the same month last year.
The Coffee Exporters Association in Brazil, Cecafé have also reported the cumulative exports of green coffee for the first nine months of the current July 2023 to June 2024 Brazil coffee year, to be 29.48% higher, overall, when compared to the same time in the previous coffee year, at a remarkable total of 32.31 million bags. This marking the second highest level of exports during the first nine months of the Brazil seasonal July to June coffee year, and in record terms only behind the record cumulative nine-month export figure recorded during the 20/21 coffee year at 33.14 million bags.
This export figure originated from the record 72 million bags production during the same period. The cumulative exports for the first nine months of the current July 2023 to June 2024 Brazil coffee year are reported by Cecafe to be made up of 26.46 million bags Arabica coffee, down 10.15% from the record export 20/21 year and a significantly increased 5.85 million bags Conillon robusta coffee, up 58.36% from the record 20/21 export year. This remarkable export performance to consumer markets is reflective of not only of the steady year on year production that has come from Brazil in 2023/24 year, and similarly the beneficial prices that have encouraged farmers to participate more fully as sellers, but most significantly indicative of the robusta market share that has come from Brazil as an alternative to the shortfall in robusta supply versus demand over the same period from leading robusta producer and exporter, Vietnam.
Looking ahead, the next Brazil crop to come is set to start in the Conillon areas and will shortly pick up pace, whereas the arabica areas, mostly natural process coffees, will start to come to the market for shipments to build to export markets around August this year. Both robusta and arabica crops ahead of 2024/25 harvest have for the most part, experienced conducive growing conditions, thus any future and unforeseen weather anomalies aside, there are signs that the this new crop to come could sufficiently fill some of the pipeline in consumer market inventory needs for robusta and arabica coffee, as well as potentially assist to build consumer stocks within these consumer countries. The steady and measured release of coffee by producers from this largest coffee producer nation may likely continue within a buoyant coffee futures market environment, to contributes toward the prevailing lack of incentive to rush ahead on selling activity while the new crop that will be required to fuel both local consumption and exports to consumer markets through to the middle of next year, is still to be harvested.
The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 6,308 bags yesterday, to register these stocks at 621,870 bags, with 99.66% of these certified stocks being held in, Europe at a total of 619,785 bags and the remaining 0.34% being held in the USA at a total 2,085 Bags. Of this, a total 314,450 bags, or 50.57% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 18.41% of these certified coffees, originating from Honduras. The pending grading stocks were seen to marginally decrease by 12,718 bags; to register 61,166 bags pending grading on the day.
The May 2024 to May 2024 contract arbitrage between the London and New York markets widened yesterday, to register this at 44.46 Usc/Lb. This equates to 20.82% price discount for the London Robusta coffee.
It was a mixed day on the commodity markets yesterday, with the leading in influence Oil markets softer on the day, ahead of the US CPI data and minutes from the US Federal Reserve’s March Policy meeting due out later today. The New York Coffee, Cocoa, Gold, Silver, Palladium and Platinum markets ended the day on a positive note, while the London Robusta Coffee, Sugar, Corn, Soybean and Wheat markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.267 Sterling, at 1.085 the Euro and with the US Dollar buying 5.009 Brazil Real.
The New York and London markets started the day yesterday trading on a modest softer note. A continuation through the early morning session oscillating between par and mildly softer in early trade, before attracting some degree of support to trend firmer and set new highs for the day. As the day progressed, the markets were seen to drop back from the early highs and tend back towards par and into negative territory. The arrival of the America’s at the start of their business day saw the New York market recover from the mid-morning lows, to trend back towards par. The London market followed suit, albeit in a more sedate manner. The New York market continued in a firmer manner for the remainder of the day’s session, in good volume of trade before being capped late in the day to drop back and settle on a firmer note at the close. The London market was seen to encounter resistance during the afternoon session to drop back and trend lower. The market rebounded from the lows of the day during the late afternoon session to see the market settle on a modest softer note at the close.
The London market ended the on a modest negative note with 43.75% of the earlier losses of the day intact, while the New York market ended the day on a positive note, with 68.06% of the earlier gains of the day intact. This mixed close for the markets, with the New York market dropping back from the earlier highs of the day towards the close, and the London market settling on a modest near to unchanged close ahead of first notice day in the prompt month in New York on the 22nd April, one might think that the markets are possibly due for a follow through steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAY 3728 – 14 MAY 213.55 + 2.45
JUL 3673 – 10 JUL 211.85 + 2.40
SEP 3591 – 4 SEP 211.15 + 2.70
NOV 3499 + 3 DEC 210.65 + 3.05
JAN 3408 + 7 MAR 210.75 + 3.20
MAR 3327 + 6 MAY 210.40 + 3.25
MAY 3255 + 6 JUL 209.55 + 3.20
JUL 3173 + 6 SEP 208.25 + 3.00
