Coffee Market Report
The Coffee Exporters Association in Brazil Cecafé have reported that the countries green coffee exports for the month of June were 43.80% higher than the same month last year, to total 3.30 million bags. This number is made up of 2.48 million bags of arabica coffee, an increase of 20.30% from the same month last year and significantly, 817,832 bags of Conilon robusta coffee up 254.50% from the same month last year.
The Coffee Exporters Association in Brazil, Cecafé have also reported the cumulative exports of green coffee for the full July 2023 to June 2024 Brazil coffee year, to be 37.20% higher, overall, when compared to the previous coffee year, at a remarkable total of 43.67 million bags. This number is made up of 35.42 million bags of arabica coffee up 16.78% from the previous coffee year and 8.25 million bags of Conilon robusta coffee, an increase year on year of 459.86% versus the previous coffee year. The export capacity from Brazil for Conilon robusta is a result of the expansive increase in Brazil robusta Conilon areas through the past ten years which has seen this crop increase from 18 million bags in 2014/15 coffee year, to 23.50 million bags in the 2023/24 coffee year. This robusta coffee is traditionally allocated to blends within the Brazil domestic market that records a coffee consumption position just shy of the leading USA consumer market, with Brazil estimated to consume an estimated 22.50 million bags of coffee per year. This latest surge in Conilon exports to consumer markets reflects the worldwide shortfall of robusta production and particularly so from leading robusta producer and exporter Vietnam, following two consecutive climatically affected lower production years. Thus, as Brazil’s robusta production has recorded year on year increases in robusta production, the sector is boosted by both domestic and export demand and the ability to accommodate the supply gap that has developed on the global stage through a combination of increased consumer market robusta demand, and lower productivity, in other robusta producer countries.
These latest export figures, meanwhile, reflect the highest level of exports recorded during a Brazil seasonal July to June coffee year, and in record terms exceeding the cumulative 12-month export figure recorded during the bumper record crop production year in 2020/21 coffee year, which was reported at 41.69 million bags. The arabica exports during the 2023/24 coffee year registering 4.17% lower year on year when compared to 2020/21 and Conilon robusta exports registering 74.42% higher year on year when compared to the previous record 2020/21 coffee year.
Cecafé have also reported that the current July 2024 to June 2025 coffee crop could potentially be smaller than initially expected for both Arabica and Robusta coffee, this after widely reported signs of lower bold bean intake and uneven ripening compared to the same period last year, which may lead to possible lower independent and private industry crop revisions in the weeks to come. This Brazil crop is still likely to be somewhere in the region of a respectable 67 million bags plus, though limited carryover stocks and low consumer market inventory conditions that prevails, may encourage further speculative sentiment in the already volatile, futures terminal markets.
The Certified washed Arabica coffee stocks held against the New York arabica market were seen to increase by 5,309 bags yesterday, to register these stocks at 808,628 bags, with 98.81% of these certified stocks held in, Europe at a total of 799,035 bags and the remaining 1.19% being held in the USA at a total 9,593 Bags. Of this, a total 416,086 bags, or 51.46% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 15.74% of these certified coffees, originating from Honduras. The pending grading stocks were seen to decrease by 9,651 bags yesterday; to register 18,113 bags pending grading on the day.
The Certified Robusta coffee stocks held against the London Exchange were seen to increase by 4,333 bags during the week up to the 8th July 2024, to register a total of 997,667,500 bags, with Brazil Conillon accounting for over 90% of coffee held against the London Exchange.
The September 2024 to September 2024 contract arbitrage between the London and New York markets widened yesterday, to register this at 40.48 Usc/Lb. This equates to 16.62% price discount for the London Robusta coffee.
It was a mixed day on the commodity markets yesterday, ahead of key US economic data due out before the end of the week, this with comments from the US Federal Reserve Chairman already indicating that that this central bank is on track to lower interest rates before the end of the year. The Sugar, Gold, Platinum and Palladium markets ended the day on a firm note, while the Coffee, Cocoa, Corn, Soybean, Wheat and Silver markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.286 Sterling, at 1.083 the Euro and with the US Dollar buying 5.416 Brazil Real.
The New York and London markets started the day yesterday trading to the south of par on very soft notes respectively, albeit in light volumes of trade for the morning session. The mid-morning session saw the markets recover marginally from the early morning lows, to find support and trend back towards par. This support was short lived as both the New York and London markets encountered resistance to see the markets fall back and continue to trend in a softer direction. As the afternoon progressed the markets slipped lower with limited speculative buyer interest at the top of the early session day, with speculative selling returning to the New York floor to trigger stops along the way. The London market followed suit and the markets continued to project lower with a measure of speculative long liquidation to accentuate the losses for the day’s trade. As the day progressed to the close selling activity started to wane toward the end of the days’ trade, to see the London market narrowly recover some of the earlier losses of the day, while the New York market was also seen to recover off of the lows of the day during the late afternoon session to settle on a softer note at the close, with most of the earlier losses of the day intact.
The London market ended the day on a negative note with 82.63% of the earlier losses of the day intact, while the New York market ended on a likewise negative note, with 84.77% of the earlier losses of the day intact. This softer close for the markets and with both the New York and the London markets retaining most of the earlier losses to settle near to the lows of 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.
SEP 4477 – 157 SEP 243.55 – 6.40
NOV 4311 – 153 DEC 241.25 – 5.95
JAN 4125 – 143 MAR 238.60 – 5.80
MAR 3972 – 131 MAY 235.80 – 5.45
MAY 3861 – 130 JUL 233.10 – 5.05
JUL 3776 – 132 SEP 230.30 – 4.75
SEP 3696 – 132 DEC 227.30 – 4.85
NOV 3642 – 132 MAR 224.35 – 5.15
