Coffee Market Report
| The National Coffee Council in El Salvador have reported that the countries coffee exports for the month of June were 16,496 bags or 26.92% lower than the same month last year, at a total of 44,766 bags. This relatively modest performance has contributed to the countries cumulative coffee exports for the first nine months of the present October 2015 to September 2017 coffee year to being 33.5% lower than the same period in the previous coffee year, at a total of 358,519 bags.
This coffee export performance from El Salvador is very much in line with the reports for a modest last harvest, but with the numbers reported so far, it is unlikely that the country might even match the generally forecasted exports of 500,000 bags for the present coffee year. Albeit that with three months still to go, that the exports might still get close to the forecasted number. The Uganda Coffee Development Authority has reported that the countries coffee exports of the month of June were 67,606 bags or 20.24% lower than the same month last year, at a total of 266,337 bags. This dip in export performance does however follow many months of positive performance and the volume of exports in June contributes to the countries cumulative coffee exports for the first nine months of the present October 2015 to September 2016 to be 101,917 bags or 4.17% higher than the same period in the previous coffee year, at a total of 2,548,129 bags. It is noted that in terms of variety that while the countries robusta coffee exports for the first nine months of the present coffee year were 1.44% lower, that the arabica coffees exports were 21.75% higher, to contribute to a ratio of 71.74 to 28.26 in terms of robusta to arabica coffees exported. However despite the improved contribution from the higher value arabica coffees exported and to the overall increase in coffee exports, the value of the coffee exports for the first nine months of the present October 2015 to September 2016 coffee year was US$ 58,567,040.00 or 19.15% lower than the same period in the previous coffee year. This dip in value that corresponds to the soft nature of the reference prices of the international coffee terminal markets for the first half of the present coffee year and despite some degree of assistance coming from the firmer U.S. dollar, has to be something of a concern for the Ugandan coffee farmers. This dip in the June exports was however to have been expected, as there had been poor rainfall for the central coffee district in Uganda, which has negatively affected the robusta coffee yields within this important coffee region in Uganda. With the USDA forecasting that this factor shall likewise impact negatively upon the export performance for July, which might result in exports for the month being as much as 35% lower than the same month last year, at around 260,000 bags. Following a dismal year so far for Indonesian robusta coffee exports as a result of the negative effects of the El Nino upon the new robusta coffee crop, there are at last some improved volumes of new crop robusta coffees coming to the mills and export ports. This is resulting in increased and a little more competitive in price robusta coffee export business out of Indonesia, but with the Vietnam robusta coffee stocks that have filled in over the year so far to counter shrinking supply of robusta coffee out of Brazil and Indonesia having been partially liquidated and with the prospects for a smaller new Vietnam robusta coffee crop forecasted, it is unlikely that increased Indonesian coffee supply will impact negatively upon the present buoyancy for the reference prices of the London robusta coffee market. The September to September contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 59.45 usc/Lb., while this equates to a 41.98% 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 2,213 bags yesterday; to register these stocks at 1,302,563 bags. There was meanwhile a larger in volume 12,025 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 4,375 bags. The Certified Robusta coffee stocks held against the London exchange were seen to decrease by 19,167 bags or 0.78% during the week of trade leading up to Monday 25th. July, to register these stocks at 2,446,833 bags, on the day. The commodity markets were mixed in trade yesterday with the U.S. dollar taking a steady track for the day and with the overall macro commodity index, taking a steady track for the day. The Brent Oil, Coffee, Cotton, Copper, Orange Juice, Soybean, Gold and Silver markets had a day of buoyancy, while the U.S. Oil, Natural Gas, Sugar, Cocoa, Wheat and Corn markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.06% higher; to see this Index registered at 420.94. The day starts with the U.S. dollar steady and trading at 1.313 to Sterling and 1.099 to the Euro, while North Sea Oil is steady in early trade and trading at 43.55 per barrel. The London and New York markets started the day yesterday with early buoyancy and with value for both markets building up into the afternoon trade, but with both markets taking a dip back to par later in the afternoon. This dip was however short lived and within an environment of relatively thin trade for the more volatile New York market, the markets recovered and took a positive track towards the close. The London market ended the day on a positive note and with 92.6% of the earlier gains of the day intact, while the New York market ended the day on a modestly positive note and with only 25.6% of the earlier gains of the day intact. This close does perhaps inspire some degree of confidence in the markets being able to settle within the present improved trading range, but one might expect little better than a near to steady start for early trade today against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. JUL 1803 + 25 |
