Coffee Market Report
| With the month of May past, the Indonesia government trade data from Sumatra which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month were 236,359 bags or 75.36% lower than the same month last year, at a total of 77,286 bags. This dip in exports has contributed to the islands cumulative robusta coffee exports for the first eight months of the present October 2015 to September 2016 coffee year to be 1,154,890 bags lower than the same period in the previous coffee year, at a total of 1,556,250 bags.
The reports from the export trade in Vietnam are forecasting that following a good export performance during May this year that they foresee exports of mostly robusta coffees for the month of June to be between 2.5 million and 2.83 million bags. These good export volumes are despite the positive price differentials that prevail for new business out of Vietnam, as the consumer markets lacking and degree of volume of competitive priced robusta coffees from other producers are obliged to pay up for the price resistant Vietnam coffees. The United States Department of Agriculture Foreign Agricultural Service has come forth with their latest forecast for the new April 2016 to March 2017 arabica coffee crop and production in Peru to be 3.2 million bags and a potential increase of 5% on that of the previous year. Alike Central America, as a combined washed Arabica producer bloc, Peru similarly suffered from an expansive and destructive roya or leaf rust outbreak three years ago, which is estimated to have affected as much as 30% of the potential yield at the time and around 40% of the total coffee area that had a marked effect on the overall coffee production in 2014, but is anticipated to register a recovery year on year, with the assistance of government programs in place for renewal of coffee areas of 80,000 hectares of coffee land. This washed Arabica producer has the potential to return back to production levels of 4 million bags and over, as was achieved prior to the leaf rust outbreak. The International Coffee Organisation have reported that the world coffee exports for the month of April registered at 8.1% decline against that of the same month last year, at a total of 9.32 million bags. This figure contributes to the world coffee exports for the first seven months of the present October 2015 to September 2016 coffee year, that is nevertheless a positive 0.7% higher than the same period in the previous coffee year, at a cumulative total of 64.781 million bags. The cumulative increase is related to higher export volumes of arabica coffees, while robusta coffee exports have registered a 7.94% fall in exports over the past twelve months ending April 2016. The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register at 47.69 usc/Lb., while this equates to a 38.51% 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 decrease by 601 bags yesterday; to register these stocks at 1,311,998 bags. There was a 4,399 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 18,844 bags. It was a mixed and mostly softer day in the commodity markets yesterday, the oil markets maintained a degree of buoyancy and the US Dollar lost some ground against other major currencies. It was a steady day for the Oil markets, Coffee and Sugar markets, a softer day in Wheat, Soybean, Corn, Cocoa, Copper, Gold, Silver, Platinum and Palladium. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.32% higher at 412.74. The day starts with the U.S. Dollar showing a degree of buoyancy and trading at 1.4436 to Sterling and 1.12 to the Euro, while North Sea Oil is tending firmer in early trade and trading at 48.92 per barrel. The London market and New York markets started the day yesterday on a steady note, New York moving toward positive territory and the London robusta market following suit. The morning session in both markets was within a positive range although volumes in London were notably restrained and turned narrowly negative toward midsession. The Brazil Real posted a weaker opening as the America’s opened their business day, to see this currency slip back to 3.6260 against the already softer US Dollar and the New York Arabica market lost the incremental gains of the morning session to slip back into negative by the middle of the session. Both markets found underlying buyer support and managed to clamber back to positive to regain a degree ground toward the end of the day in New York and this latter market finishing the day in positive territory. The volume in London remained modest to the end of the day and after a mostly range bound session to finish on a mildly negative note in London and set the close in both markets yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1646 – 2 JUL 121.90 + 0.35 |
