Coffee Market Report
The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of September was 222,000 bags or 26.15% higher than the same month last year, at a total of 1,071,000 bags. The National Coffee Growers Federation have reported that the country’s cumulative coffee production for the full October 2023 to September 2024 coffee year to be 2,141,000 bags or 20.18% higher than the same period in the previous coffee year, at a total of 12,749,000 bags.
The National Coffee Growers Federation in Colombia have meanwhile reported that the country’s coffee exports for the month of September were 160,000 bags or 19.34% higher than the same month last year, at a total of 987,000 bags. The National Coffee Growers Federation have reported that the country’s cumulative coffee exports for full October 2023 to September 2024 coffee year are 1,082,000 bags or 10.09% higher than the same period in the previous coffee year, at a total of 11,806,000 bags.
It is the early stages of the October 2024 to September 2025 new crop harvest season for Colombia, Central America and Mexico coffee producers, where quality washed coffee harvests are soon to pick up pace. This while Hurricane Milton, which has been re-classified as a category 5 storm, continues to track towards the Florida coastline, expected to make landfall later this evening. Traditionally the seasonal hurricane season in the Gulf of Mexico comes to an end around November, one might anticipate further storms to form over the next few weeks to bring along spells of heavy winds and rainfall. The weather within the largest quality washed arabica producer bloc which accounts for an average 70% washed arabica production, has experienced some degree of hot and dry weather conditions during the cherry set phase, dampening expectations for a largely improved overall production.
Ahead of the harvest that is set to soon pick up pace within the region meanwhile, coffee production for the October 2024 to September 2025 Coffee year in Colombia is forecast to potentially be 3.95% higher than the previous coffee year at a total of around 13 million bags. This forecast, although improved year on year is shy of the country’s average potential production of around 13.60 million bags per seasonal year. In Mexico coffee production for the October 2024 to September 2025 coffee year is forecast to remain steady at an estimated total of 3.20 million bags. Guatemala meanwhile is forecast for steady production when compared to the previous year, to potentially produce 3.30 million bags, whereas Honduras is likewise anticipated to register an increase in production year on year to potentially reach 5.20 million bags.
Many independent forecasters therefore foresee production to come from Mexico, Colombia and Central America collectively, due for an increased production. Much of this increase is anticipated to come from Colombia. The current new Central American coffee year that is indicated to have the potential to improve year on year, follows the 2023/24 coffee year that in production terms, recorded at nine-year low. One might also comment that in the context of the improved value to be had on the arabica futures markets, has internal farm prices a good incentive to encourage increased investment in farm inputs and labour, heading into the new October 2024 to September 2025 coffee year. This is countered however by the extended challenges surrounding socio economic factors and the ability to afford labour for the upcoming harvests, that is exacerbated by the trend of urbanisation and migration to the north.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 6,071 bags yesterday, to register these stocks at 807,785 bags, with 97.84% of these certified stocks held in Europe at a total of 790,371 and the remaining 2.16% being held in the USA at a total 17,414 Bags. Of this, a total 366,174 bags, or 45.33% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 16.14% of these certified coffees, from Honduras. The pending grading stocks were seen to increase by 10,480 bags, to register 55,206 bags pending grading on the day.
The November 2024 to December 2024 contract arbitrage between the London and New York markets widened yesterday, to register this at 27.94 Usc/Lb. This equates to 11.26% price discount for the London robusta coffee.
It was a softer day overall on the commodity markets yesterday, as geopolitical tensions in the Middle East continue to influence investor sentiment, whilst market players await key financial data due to be released in the US later this week for cues on the potential for a second consecutive interest rate cut to come. The New York Arabica Coffee, Cocoa and Wheat markets ended the day on a firm note, while the London Robusta Coffee, Corn, Sugar, Soybean, Gold, Silver, Palladium and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.308 Sterling, at 1.096 the Euro and with the US Dollar buying 5.535 Brazil Real.
The New York and London markets started the day yesterday trading on firmer notes respectively, making gains during the morning session to see both the New York and London markets set a new high for the day’s session early in the day. The late morning session saw the markets drop back from the early highs as there was a degree of selling pressure seen to weigh the markets lower. As the afternoon progressed, the London market traded back through par, albeit in light volumes of trade. The New York market was seen to trade in a comparatively narrow range on the day, recovering from the day’s lows during the late afternoon session to see the market settle on a firmer note, with most of the earlier gains of the day intact, albeit in light volumes of trade on the day. The London market recovered from the lows of the session to trend firmer towards the close. The market encountered resistance late in the day to limit the upward momentum and see the London market settle on a 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 25.53% of the earlier losses of the day intact, while the New York market ended on a positive note, with 83.53% of the earlier gains of the day intact. This mixed close for the markets, with the London market recovering most of the earlier losses to settle near to unchanged on a modest softer note, the New York market settled on a firmer note maintaining most of the earlier gains of the day to possibly see the market set 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.
NOV 4856 – 12 DEC 248.20 + 3.55
JAN 4684 + 24 MAR 246.95 + 3.60
MAR 4513 + 28 MAY 245.15 + 3.70
MAY 4386 + 39 JUL 242.85 + 3.75
JUL 4273 + 49 SEP 240.20 + 3.85
SEP 4195 + 54 DEC 235.75 + 3.95
NOV 4123 + 54 MAR 231.35 + 3.95
JAN 4043 + 54 MAY 227.45 + 3.95
