Coffee Market Report
Within Mexico, Colombia and Central America, weather conditions have been reported to have seen periods of increased rainfall following the hurricane season in the Gulf of Mexico. This increased rainfall comes after a hot and dry spell experienced during the second quarter of the year. The harvest season is picking up pace despite the weather conditions with harvesting and drying activities underway.
This producer bloc is forecast to collectively produce around 30 million bags in the October 2024 to September 2025 coffee crop, to boost quality washed arabica coffee availability for export to consumer markets in the new year.
Many independent forecasters therefore foresee production to come from Mexico, Colombia and Central America collectively, due for a marginal increase in production. Much of this increase is anticipated to come from Colombia. The 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 a decade low. One might also comment that logistics remain a challenge in general, with limited vessel and equipment availability leading to a number of shipment delays.
Coffee production to come from Colombia is forecast to potentially be 3.95% higher than the previous coffee year at a total of around 13 million bags for the October 2024 to September 2025 Coffee year. The National Coffee Growers Federation in Colombia reporting that the country’s cumulative coffee exports for first two months of the current October 2024 to September 2025 coffee year 11.63% higher than the same period in the previous coffee year, at a total of 2.23 million bags.
In Mexico, coffee production for the October 2024 to September 2025 coffee year is forecast to increase by around 6.90% at an estimated total of 3.20 million bags. Guatemala is forecast for steady production when compared to the previous year, to potentially produce 3.30 million bags. Largest Central America producer, Honduras was anticipated ahead of harvest, to register an 8.70% increase in production year on year. This is a factor that will continue to be monitored as deliveries from the slightly delayed harvesting this country, are slow to come to the fore.
The Vietnam Coffee and Cocoa Association have reported that the primarily Rousta coffee producing nation is likely to produce between 26.67 and 28.33 million bags during the current October 2024 to September 2025 coffee year, this figure somewhat conservative when compared to the median 28.50 million bags that has been forecast by many independent bodies. The report also states that Vietnams internal coffee consumption is expected to be between 4.50 to 5.00 million bags during the current season. Of this new October 2024 to September 2025 crop, the forecast is that Vietnam will export 9.00% more than the previous October 2023 to September 2024 coffee year, at a total of around 23 million bags.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 8,285 bags yesterday, to register these stocks at 919,388 bags, with 98.14% of these certified stocks held in Europe, at a total of 902,294 bags and the remaining 1.86% being held in the USA at a total 17,094 Bags. Of this, a total 547,287 bags or 59.53% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 11.07% of these certified coffees, from Peru. The pending grading stocks were seen to decrease by 220 bags on the day, to register 109,610 bags pending grading on the day.
The January 2025 to March 2025 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 86.10 Usc/Lb. This equates to 26.89% price discount for the London robusta coffee.
It was a firmer day on the commodity markets yesterday, as inflation data came in line with expectations boosting the likelihood of an interest rate cut next week, whilst investors await Producer Price Index Data due out tomorrow. The Corn, Cocoa, Sugar, Soybean, Wheat, Gold, Silver and Palladium markets ended the day on a firm note, while the Coffee and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.276 Sterling, at 1.050 the Euro and with the US Dollar buying 5.954 Brazil Real.
The New York and London markets started the day yesterday pressured lower during the early session, dropping below par to trend in a softer direction from the open. The markets continued a softer trajectory as further resistance was encountered to see the markets move lower during the remainder of the morning session. As the afternoon progressed the volume increased to contribute to the day’s direction with speculative selling on the New York floor assisting to trigger stops along the way. The London market followed suit, and the markets continued to project lower with a large degree of speculative long liquidation to accentuate the losses for the day’s trade. The selling activity started to wane toward the end of the days’ trade, to see the London market recover from the earlier lows and settle on a softer note with half of the earlier losses of the day intact, whilst the New York market settled with near to the lows of the day on a very soft note with most of the earlier losses of the day intact.
The London market ended the day on a negative note with 50% of the earlier losses of the day intact, while the New York market ended the day a likewise negative note, with 92.69% of the earlier losses of the day intact. This very soft close, with the New York market tracking softer throughout the session to settle near to the lows of the day, might lead one to 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.
JAN 5161 – 107 MAR 320.20 – 13.95
MAR 5101 – 131 MAY 317.80 – 13.75
MAY 5042 – 135 JUL 313.05 – 13.35
JUL 4964 – 132 SEP 306.05 – 12.70
SEP 4877 – 126 DEC 293.75 – 11.60
NOV 4805 – 126 MAR 283.85 – 10.90
JAN 4727 – 126 MAY 274.00 – 10.45
MAR 4657 – 126 JUL 264.05 – 9.95
