Coffee Market Report
Trade within the washed arabica producer bloc of Central America is reported to have started to pick up pace following the delayed harvest due to the adverse weather conditions experienced during the months leading up to the harvest, culminating with Tropical Storm Sara bringing with it heavy rainfall into November across the region. The coffee crops harvested over the first three months of this October 2024 to September 2025 coffee export year, have begun to flow to consumer markets. Honduras is the largest of this regional quality washed arabica producer and exporting region that is made up of Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador. The coffee flow from smaller coffee producer nations in Central American should pick up pace. Cumulatively Costa Rica, El Salvador, Guatemala, Nicaragua export performance forecast to be steady year on year over the same period in the previous coffee year. The have been concerns raised through harvest season regarding the availability and affordability of labour, exacerbated a trend of migration to the north.
The National Coffee Institute of Honduras (IHCAFE) have reported preliminary data that the country’s coffee exports for the month of December were 34,382 bags or 12.37% lower than the same month last year, at a total of 243,593 bags. Weather conditions have improved although one might comment that the weather experienced through crop development may lead to some revision on pre-harvest production estimates in the weeks ahead.
Further to the south, the next new crop harvest may be expected to start in a couple of months' time, in Peru, where the forecasts for the coming April 2025 to March 2026 coffee crop year will soon start to come to the fore. The current April 2024 to March 2025 coffee year that is nearing its end is forecast to reach 3.60 million bags or 12.20% decrease in production on that of the previous year.
The largest quality washed arabica producer, Colombia that has two harvests per year, will soon look to the start of their mitaca harvest. Colombia’s total crop production for the October 2024 to September 2025 coffee year, is forecast to reach around 13 million bags or 3.95% higher than the previous coffee year. It is estimated that the country should be able to export approximately 11.20 million bags in the current October 2024 to September 2025 coffee year, an improvement of 9.95% year on year.
The National Coffee Growers Federation in Colombia have reported cumulative coffee exports for first three months of the current October 2024 to September 2025 coffee year look to bring forth a positive performance, registered at 448,000 bags or 14.59% improvement on the same period in the previous coffee year, to a total of 3,518,000 bags. One might comment that although harvest activities are continuing, there remains concerns regarding the availability and affordability of labour, exacerbated by a growing trend of migration to the north.
Within the northern hemisphere traditional coffee consumer markets, the outlook consensus by economists, barring the uncertain nature of trade and economic policies that may be forthcoming from influential USA., is for a continuation of the constrained economic conditions and consumer market environment experienced in 2024. The annual World Economic Forum is being held in Davos next week, and ahead of the same, most the signals from economist circles are for the likelihood of inflation to continue to be at the forefront of economic policy making decisions. Often the market speculation surrounding fiscal policy, trade and geopolitical decisions can be anticipated to react within uncertain market and currency conditions, to indicate a likely continuation of volatility on the exchanges, to include amongst other investment sectors, the commodities sector.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 12 bags yesterday, to register these stocks at 979,142 bags, with 98.12% of these certified stocks held in Europe, at a total of 960,766 bags and the remaining 1.88% being held in the USA at a total 18,376 Bags. Of this, a total 627,113 bags or 64.05% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 9.79% of these certified coffees, from Peru. The pending grading stocks were seen to decrease by 9,087 bags on the day, to register 34,955 bags pending grading on the day.
The March 2025 to March 2025 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 105.39 Usc/Lb. This equates to 32.21% price discount for the London robusta coffee.
It was a mixed but overall softer day on the commodity markets yesterday, following core inflation data reflecting a 0.2% increase in December in the USA, after rising 0.3% for the preceding three months, this raising speculative bets of an ease in monetary policy to come. The Sugar, Gold, Silver and Platinum markets ended the day on a firmer note, while the Coffee, Cocoa, Corn, Soybean, Wheat and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.222 Sterling, at 1.029 the Euro and with the US Dollar buying 6.050 Brazil Real.
The New York and London markets started the day yesterday trading in mild positive territory to the north of par, albeit in light volumes of trade for the morning session. During the mid-morning session, the markets continued to garner support, trending in a firmer direction to set a new high for the day. Both The New York and the London markets encountered resistance near to the highs of the day, as the markets fell back to drop below par. As the afternoon progressed the markets slipped lower with limited speculative buyer interest at the top, 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. The selling activity started to wane within the New York market during the late afternoon session, with the London market following suit to recover some of the earlier losses of the day, while the New York market recovered off the lows of the day, to settle on a softer note and most of the earlier losses of the day intact.
The London market ended the day on a negative note with 79.31% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, with 62.85% of the earlier losses of the day intact. This softer close for the markets follows a firmer start to the day’s session with both markets dropping back throughout the session to settle on softer notes at the close in a light volume day, to possibly see the markets set for another hesitant steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
MAR 4889 – 23 MAR 327.15 – 3.30
MAY 4846 – 10 MAY 323.15 – 2.90
JUL 4775 – 5 JUL 316.55 – 2.85
SEP 4689 – 3 SEP 307.95 – 3.10
NOV 4604 – 1 DEC 293.60 – 3.45
JAN 4526 – 2 MAR 283.55 – 3.20
MAR 4448 – 9 MAY 274.40 – 3.10
MAY 4373 – 9 JUL 264.60 – 3.25
