Coffee Market Report
| The Brazil Coffee Export Association Cecafe have reported that the countries green coffee exports for the month of April were 584,165 bags or 21.37% lower than the same month last year, at a total of 2,149,214 bags. Added to this are the exports of value added soluble coffees calculated in terms of their green coffee equivalent which were 45,309 bags or 15.1% lower than the same month last year at 254,829 bags.
Thus the combination of green and soluble coffee exports for the month of April were 594,654 bags or 21.76% lower than the same month last year, at a total of 2,404,043 bags. While in terms of value the total Brazil coffee exports for the month were 148 million U.S. Dollars or 29.59% lower than the same month last year, at a total of 352.2 million U.S. Dollars. However in terms of domestic currency and with a weaker Brazil Reais in play, the April exports this year were a more modest 17.27% lower in value than the same month last year, but once adjusted for inflation over the past year the dip is perhaps quite significant. While with Brazil having since liquidated most of the significant arabica coffee stocks that were in hand a year ago, one might think that for the coming two to three months and until such time as the new crop coffees start flowing into the market, that the country shall continue to report relatively modest coffee export figures. The National Coffee Association of Guatemala have reported that the countries coffee exports for the month of April were 33,702 bags or 9.28% higher than the same month last year, at a total of 397,059 bags. This figure contributes to the countries cumulative coffee exports for the first seven months of the present October 2015 to September 2016 coffee year to being 77,734 bags or 5.58% higher than the same period in the previous coffee year, at a total of 1,469,992 bags. It is somewhat remarkable that this seemingly free flow of exports from Guatemala for this coffee year so far, is despite the strong internal market price resistance within the country, which has resulted in relatively firm export differentials being demanded by the countries exporters. But with Guatemala coffee something of a brand name in the mostly Japanese and North American markets, it would seem that rather alike the situation in Hawaii, Costa Rica, Kenya, Sumatra and for the washed coffees from Ethiopia, there is little in the way of consumer market price resistance from within the speciality sectors of these markets, for their Guatemala coffee requirements. The well-respected U.S.A. Department of Agriculture Foreign Agricultural Service has reported that they forecast that Ecuador’s green coffee production for the countries April 2016 to March 2017 coffee year shall be 16,000 bags or 7.37% lower than the previous twelve months, at a total of 201,000 bags. However Ecuador does import significant volumes of coffee for value adding processing and export in the form of soluble coffees however even this industry the USDA foresee to be under some degree of competitive pressure, with their forecast that the countries coffee exports for the coming year shall decline by 246,000 bags or 29.25%, to total the equivalent of only 595,000 bags. The July on July contracts arbitrage between the London and New York markets broadened yesterday, to register this at 53.95 usc/Lb., while this equates to a 41.58% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, continues to inspire support for the robusta coffee sector of the industry. The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 1,980 bags yesterday; to register these stocks at 1,373,444 bags. There was meanwhile a larger in volume 2,750 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 3,495 bags. The commodity markets were mixed but with the Oil markets stepping to the fore they had another generally positive day yesterday, with the overall macro commodity index continuing to take a positive track for the day. The Oil, Sugar, Coffee, Copper, Orange Juice, Gold and Silver markets had a day of buoyancy, while the Natural Gas, Cocoa, Cotton, Wheat, Corn and Soybean markets tended softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.05% higher; to see this Index registered at 410.20. The day starts with a steady U.S. Dollar which is trading at 1.443 to Sterling and 1.142 to the Euro, while North Sea Oil is showing a degree of buoyancy in early trade and is selling at 46.50 per barrel. The London and New York markets started the day yesterday with a degree of buoyancy and maintained a positive stance into the afternoon trade, but with both markets coming under pressure and moving back into modest negative territory. However as the afternoon progressed both markets recovered and moved back north of par and once again started to build upon their gains, to take a steady upside track for the rest of the day’s trade. The London market continued to end the day on a positive note and with 73.3% of the earlier gains of the day intact, while the New York market ended the day on a very positive note and with 95.3% of the earlier gains of the day intact. This close and with the ability of the markets to buck off the mid-afternoon spell of negative trade might be seen to be supportive for sentiment and a degree of confidence, which is likely to set the markets for a cautiously steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. MAY 1642 + 11 MAY 127.90 + 1.00 |
