Coffee Market Report
The International Coffee Organisation ICO have maintained their estimate for global coffee supply at 5.83% lower than the 2022/2023 coffee year at a total of 178.00 million bags for the October 2023 to September 2024 coffee year. The International Coffee Organisation have likewise maintained their estimate for global consumption for the October 2023 to September 2024 coffee year, to have grown by 2.25% from the previous year to reach a total of 177.00 million bags. The International Coffee Organisation is due to shortly release their estimates for the current October 2024 to September 2024 coffee year.
The International Coffee Organisation ICO have reported that the global coffee exports for the month of September were 24.90% higher than the same month in the previous year, at a total of 10.76 million bags. This they say, has contributed to the cumulative global coffee exports for the full October 2023 to September 2024 coffee year to be 11.70% higher than the same period in the previous year, at a reported total 137.27 million bags.
The report reflects an increase in exports from South America during September, which registered a 30.80% increase in exports to consumer markets, when compared to the same month in the previous year, to register 6.20 million bags through to the end of September. This marks the end of the October 2023 to September 2024 coffee year where the ICO reports exports for South America at 66.13 million bags in total, an increase of 30.70% from the previous year. Brazil and Colombia, the primary source of the growth in exports over the reported coffee year with Brazil reporting a 34.30% jump in exports during the 2023/24 year to register 49.03 million bags exported, noting this is reported over the traditional October to September period and not the Brazil July to June crop period. Colombia reported 13.70% growth in exports during the 2023/24 year to register 11.91 million bags exported.
The report confirms an increase in exports from Asia as Vietnam, India and Indonesia cumulatively registered 19.60% increase in exports, when compared to the same month in the previous year to total 1.91 million bags in September. The ICO reports and overall decrease of 6.70% in exports for the October 2023 to September 2024 coffee year to total 40.62 million bags when compared to the previous year.
Within the ICO report, exports were seen to have increased by 14.30% year on year from Africa to a total 1.37 million bags for the month of September, with overall exports for the October 2023 to September 2024 coffee year seeing exports registering at 16.02 million bags, some 17.30% higher than the previous coffee year. The main contributors of the increase in exports for the coffee year being Ethiopia with exports registering 63.50% higher year on year at 5.59 million bags.
The ICO report similarly includes within the total global exports, the export figures, from Mexico and the traditional washed arabica Central American bloc; Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador, to report for September that exports were 18.10% higher than the same period in the previous year to total 900,000 bags. For the complete October 2024 to September 2023 coffee year, exports from the region totalled 14.51 million bags, down 4.10% from the previous year.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,480 bags yesterday, to register these stocks at 854,963 bags, with 97.89% of these certified stocks held in Europe at a total of 836,909 bags and the remaining 2.11% being held in the USA at a total 18,054 Bags. Of this, a total 435,283 bags or 50.91% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 14.90% of these certified coffees, from Nicaragua. The pending grading stocks were seen to decrease by 883 bags on the day, to register 95,255 bags pending grading on the day.
The December 2024 to January 2025 contract arbitrage between the New York and London markets widened yesterday, to register this at 56.92 Usc/Lb. This equates to 21.86% price discount for the London robusta coffee.
It was a firmer on the commodity markets yesterday, with the US Federal Reserve announced a lower interest rate, by 25 basis points during yesterday’s monetary policy meeting. The Coffee, Cocoa, Corn, Soybean, Sugar, Gold, Silver and Platinum markets ended the day on a firm note, while the Wheat and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.296 Sterling, at 1.078 the Euro and with the US Dollar buying 5.692 Brazil Real.
Meanwhile, the Monetary Policy Committee from The Central Bank in Brazil has raised the Selic rate by 50 basis points this week, to now be 11.25%. This in an attempt to curb rising inflation as well as uncertainty surrounding global financial markets and effects that may be had on the Brazil Real which has been seen to weaken by 2.85% over the last month against the US Dollar.
The New York market started the day yesterday trading in modest firmer territory, whilst the London market started the day yesterday on a very firm note, the markets gained support quickly during the very early session to set the tone for the day. The markets projected a firmer trajectory into the mid-morning session, supported by buying support. As the afternoon progressed, the markets continued on their bullish path, buoyed by support which saw buy stops tiggered along the way. The New York market was seen to settle on a very firm note at the close, with most of the earlier gains of the day intact, while the London market was seen to also settle on a very firm note at the close with most of the earlier gains of the day intact in what was a heavy volume day for both markets ahead of options expiry in the New York market today.
The London market ended the day on a positive note with 89.05% of the earlier gains of the day intact, while the New York market ended on a likewise positive note, with 92.09% of the earlier gains of the day intact. This firmer close for the markets, might indicate some degree of support and direction with both the New York and London market gaining momentum throughout the session to settle near to the highs of the day, ahead of first notice day on the prompt month in the New York market due in less than two weeks’ time. One might therefore think that the markets might be pressured for a steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
JAN 4486 + 179 DEC 260.40 + 11.65
MAR 4424 + 176 MAR 259.75 + 11.70
MAY 4365 + 176 MAY 258.35 + 11.65
JUL 4282 + 167 JUL 255.75 + 11.20
SEP 4208 + 159 SEP 252.45 + 10.80
NOV 4151 + 149 DEC 246.90 + 10.05
JAN 4086 + 149 MAR 241.90 + 9.00
MAR 4027 + 149 MAY 237.65 + 8.35
