Coffee Market Report
| The Coffee Board of India have reported their production figure for the October 2023 to September 2024 coffee crop to have reached a total of 6.24 million bags, of which 4.92 million bags were exported. This figure in line with earlier reports from independent forecasters. The Coffee Board have signalled that there will likely be a drop in production for the current October 2024 to September 2025 coffee year, due to unfavourable weather conditions experienced in the Karnataka and Kerala regions. High temperatures during the earlier months of April and May last year, affected the flowering and cherry set of the trees during the early stages of development of this current 2024/2025 crop. These warmer than usual temperatures were followed by heavy rainfall during July and throughout the first half of August, which is traditionally seen as the monsoon season over the main coffee districts runs from June through to September. The India Meteorological Department have reported that the country had received on average, 7% more rainfall during the past monsoon season when compared to the previous year. The Coffee Board have not yet finalised production figures for the current 2024/2025 coffee year, which is expected to produce around 6 million bags per the early estimates from independent forecasters.
The new harvest season harvest for arabica coffee in China, India and Vietnam is underway. Within China, arabica coffee is mainly grown in the Yunnan Province and forecast to produce around 1.80 million bags for the current 2024/2025 coffee year, on par with the previous coffee year. Within the producing nations of India and Vietnam meanwhile, arabica coffee production represents a portion of overall coffee production. The USDA report the October 2024 to September 2025 India arabica coffee at 80% washed process and to potentially reach 1.10 million bags, representing 17.75% in overall production. Vietnam, meanwhile, with greater recognition internationally as the leading producer of robusta coffee, is expected to produce 1.15 million bags of arabica coffee during the 2024/2025 year, around 3.85% of overall coffee production from Vietnam. Nations like China, India, Indonesia, and Vietnam have seen notable increases in domestic coffee consumption alongside growth in value-added products and export sectors. China has seen their domestic consumption increase by 40% over the last 5 years to potentially reach 6.20 million bags during the 2024/2025 coffee year as reported by USDA. Domestic consumption within Indonesia meanwhile is anticipated to reach 4.80 million bags during the current coffee year, growing 10.35% over the last 5 years. While Vietnam internal domestic consumption is anticipated by the USDA to total 3.60 million bags during the 2024/2025 coffee year, marking growth of 33.33% over the last 5 years. It is worth noting that these markets are traditionally tea focused markets and coffee consumption is growing from a relatively low base, mainly driven by the popularity of trendy urban coffee shops that appeal to younger generations. Similarly, non-producing areas such as the Middle East, led by Saudi Arabia which has seen coffee consumption increase by 20% over the last four years to reach 1.44 million bags during the 2024 year. The question remains as to whether coffee consumption may start to reflect consumer price resistance in these comparatively new coffee consumer markets that are inherently economically sensitive to sharp price moves, whilst some of these key economies reflect weaker signals, along with the rise in the coffee futures market over the last 6 months. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 24,655 bags yesterday, to register these stocks at 902,995 bags, with 97.67% of these certified stocks held in Europe, at a total of 881,969 bags and the remaining 2.33% being held in the USA at a total 21,026 Bags. Of this, a total 583,073 bags or 64.57% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 10.13% of these certified coffees, from Peru. The pending grading stocks were seen to increase by 27,727 bags on the day, to register 33,341 bags pending grading on the day. The March 2025 to March 2025 contract arbitrage between the London and New York markets widened yesterday, to register this at 114.13 Usc/Lb. This equates to 31.14% price discount for the London robusta coffee. It was an overall firmer day on the commodity markets yesterday, as the US Federal Reserve confirmed what was expected, with interest rates remaining steady at the first policy meeting for 2025. The Coffee, Cocoa, Corn, Sugar, Soybean, Wheat, Gold, Silver, Platinum and Palladium markets ended the day on a firmer note. The day starts with the U.S. Dollar trading at 1.244 Sterling, at 1.042 the Euro and with the US Dollar buying 5.856 Brazil Real. The New York and London markets started the day yesterday trading in positive territory, carrying through momentum from the firmer on Tuesday. The New York market gained support and momentum from early in the day, to trend firmer for the remainder of the session. Both the New York and London markets were seen to build support as the day progressed. The arrival of the America’s at the start of their business day pushed New York higher, triggering buy stops along the way to accentuate the gains for the day, the New York market gained ground throughout the afternoon session, with the London market following suit to make gains throughout the afternoon session. The New York market continued the upward momentum before being capped very late in the day, to see the market drop back and settle on a very firm note at the close, with most of the earlier gains of the day intact, whilst the London market followed suit to likewise settle on a firmer note at the close, near to the highs of the day. The London market ended the day on a positive note with 81.66% of the earlier gains of the day intact, while the New York market ended the day on a likewise positive note, with 75.73% of the earlier gains of the day intact. This follow through firmer close, marks the sixth consecutive firmer session for the markets, which might indicate some degree of continued 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 in fair volumes of trade. One might therefore think that the markets might be in for a follow through steady start to early trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK USC/LB. MAR 5609 + 49 MAR 366.55 + 9.05
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