Coffee Market Report
The National Coffee Institute of Costa Rica (ICAFE) have reported that the country’s coffee exports for the month of July were 16,600 bags or 16.35% higher than the same month last year, at a total of 118,150 bags. This they say has contributed to the cumulative coffee exports for the first ten months of the current October 2023 to September 2024 coffee year to be 5.00% lower than the same period in the previous year, at a total of 818,726 bags. The National Coffee Institute of Costa Rica ICAFE, have estimated production for the October 2023 to September 2024 coffee year will total 1.30 million bags or around 13% lower than the previous coffee year.
In the latest consumer stock reports, the European Coffee Federation, E.C.F. have reported that the port warehouse coffee stocks held within reporting warehouses in Belgium, Germany, France, Italy and Spain, to have registered a 4.51% increase during the month of June 2024 to total 8,410,783 bags at the end of the month. The stocks are reported as 3,062,583 bags robusta coffee, 2,358,717 bags natural arabica coffee Including Brazil semi-washed and 2,989,467 bags washed arabica coffee.
This figure reported at the end of June 2024 is 27.26% lower than the same time last year when the port warehouse coffee stocks registered at 11,564,167 at the end of June 2023. It is worth noting that the overall Robusta stock levels at the end of June, is 33.72% lower over the first four months of the 2024 calendar year when compared to the same period last year and considered to be very low in terms of roaster demand, illustrating the prevailing overall tightness in the Robusta coffee market.
Within seasonal coffee flow context, a few robusta producing countries are able to support the prevailing lower consumer stocks, with exports from dominant producer Brazil for the Conilon robusta, Indonesia and Uganda mid calendar year robusta harvests, contributing to this, whilst the tighter robusta supply environment from the leading robusta coffee producer Vietnam, is unlikely to ease until this country’s new crop harvest starts to come to market toward the end of the year. Vietnam harvest is traditionally due to start in the latter quarter of 2024, for shipments start flowing to consumer markets towards end year, beginning of 2025. This new October 2024 to September 2025 Vietnam Robusta crop is estimated by independent forecasters to potentially reach in the region of 27.85 million bags.
The Brazilian Real depreciated against the US Dollar, weakening by 6.37% over the last three weeks, settling at a yearly low against the US Dollar as of yesterday. This depreciation may encourage increased selling activity within Brazil, as returns to producers are higher in Real terms. One might comment that while the harvest in the Arabica areas reaches its peak, well financed producers continue to release coffees in a measured pace. Logistics from Brazil continue be challenging, with a number of delays being experienced from key export ports.
The Certified washed arabica coffee stocks held against the New York arabica market were seen to increase by 7,895 bags yesterday, to register these stocks at 822,819 bags, with 98.10% of these certified stocks held in, Europe at a total of 807,176 bags and the remaining 1.90% being held in the USA at a total 15,643 Bags. Of this, a total 413,221 bags, or 50.22% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 15.28% of these certified coffees, from Honduras. The pending grading stocks were seen to decrease by 10,250 bags on the day; to register 36,523 bags pending grading on the day.
The September 2024 to September 2024 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 35.61 Usc/Lb. This equates to 15.67% price discount for the London robusta coffee.
It was an overall softer day on the commodity markets yesterday, with the US Dollar firmer by 0.3% against a basket of other currencies on the day, ahead of US Payrolls data due out later today. The leading in influence Oil market was lower on the day. The Gold markets ended the day on a firm note, while the Coffee, Cocoa, Sugar, Corn, Soybean, Wheat, Silver, Platinum and Palladium markets ended the day on a negative note. The day starts with the U.S. Dollar trading at 1.272 Sterling, at 1.079 the Euro and with the US Dollar buying 5.752 Brazil Real.
The New York market started the day yesterday trading in modest firmer territory, whilst the London market started the day yesterday trading to the south of par on softer note, the markets gained support quickly during the very early session under limited volumes of trade to set a ceiling for the morning session. The support was short lived as the markets encountered resistance to drop back from the early highs and trend through par and into negative territory to extend the losses from the close on Wednesday. A degree of speculative long liquidation followed, to see both the New York and London markets drop and set a new low for the day, setting a comparatively modest trading range on the day. As the afternoon progressed and the activity increased, the markets found support near to the lows of the day to recover from the earlier losses whilst trading below par and in negative territory, the New York market settled on a softer note at the close with half of the earlier losses of the day intact, whilst the London market settled on a likewise softer note at the close with only some of the earlier losses of the day intact.
The London market ended the day on a negative note with 34.95% of the earlier losses of the day intact, while the New York market ended on a likewise negative note, with 49.38% of the earlier losses of the day intact. This follow through softer close for the markets, extending the losses from the close on Wednesday does little to inspire confidence, albeit that the markets recovered from the lows of the day during the late afternoon session and with first notice day in the prompt month in New York approaching in less than three weeks’ time, one might think that the markets are due 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.
SEP 4225 – 36 SEP 227.25 – 1.95
NOV 4083 – 33 DEC 226.40 – 1.75
JAN 3941 – 29 MAR 225.35 – 1.55
MAR 3814 – 25 MAY 223.45 – 1.35
MAY 3716 – 23 JUL 221.55 – 1.25
JUL 3630 – 19 SEP 219.70 – 1.25
SEP 3558 – 18 DEC 217.40 – 1.15
NOV 3498 – 20 MAR 215.15 – 1.10
