Coffee Market Report
| The Colombian Coffee Growers Federation has reported that the country’s coffee production for the month of July was 227,000 bags or 18.37% higher than the same month in the previous year, at a total of 1,463,000 bags. This higher performance follows many months of rising production levels and the cumulative production for the first ten months of the present October 2014 to September 2015 coffee year is now 950,000 bags or 9.44% higher than the same period in the previous coffee year, at a total of 11,011,000 bags.
It is similarly the case in terms of Colombian fine washed arabica coffee exports and the Coffee Growers Federation has reported that coffee exports for the month of June were 245,000 bags or 25.26% higher than the same month last year, at a total of 1,215,000 bags. This improved performance has contributed to the countries cumulative exports for the first ten months of the present coffee year to be 850,000 bags or 9.19% higher than the same period in the previous coffee year, at a total of 10,103,000 bags. All indications are now that with the tail end of the new mid-year Mitaca crop harvest still coming in to the mills and with production over August and September likely to be in excess of 2 million bags, that Colombia is well on track for the present coffee year to register production of close to 13 million bags, which is a long way up from the dip during the La Nina phenomenon to production below 8 million bags. Likewise with Colombia having been a relatively ready and steady competitive seller of their fine coffees and in competition that exports for this present coffee year might get close to 12 million bags. This improved production and exports from Colombia is accompanied by the significant recovery in production and exports from Honduras for this present coffee year, to see these two countries jointly increase exports for the first ten months of the present October 2014 to September 2015 coffee year, by 1,712,615 bags. These exports extrapolating to combined exports for the first ten months of the present coffee year to 14,952,345 bags of fine washed arabica coffees and therefore, dominating this high end sector of the consumer markets. This factor and with the prospects for the figure to well exceed 16.5 million bags of fine washed arabica coffees by the end of the coffee year, would indicate that Colombia and Honduras shall jointly account for over 45% of mild coffee supply to the consumer markets. While in the meantime Brazil accounts for approximately 90% of natural arabica coffee supply to the consumer markets and Vietnam accounts for approximately 60% of robusta coffee supply to the consumer markets, which highlights the dominance of these four countries within the order books of the main stream consumer market roasters. There was little in the way of news other than the impressive Colombian production and export figures coming to the market yesterday, but with many leading consumer market players presently on holiday there are likewise few readers of the coffee news. Thus for the present the market aside from the activities of the funds within the futures markets, coffee trade remained dull and lacklustre in nature yesterday. The arbitrage between the markets broadened yesterday to register this at 53.20 usc/Lb., while this equates to a 41.24% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market. The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 4,805 bags yesterday; to register these stocks at 2,096,755 bags. There was meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,680 bags. The commodity markets were lacklustre in trade yesterday despite the further good economic figures that were forthcoming from the U.S.A., with the funds looking to the muscle of the U.S. dollar and seemingly remaining disinterested in the commodity sector. Thus the overall macro commodity index had a soft day’s trade and by nature, tending to impact upon sentiment within many markets. The Coffee, Wheat and Soybean markets were nevertheless buoyant and the Cotton and Silver markets steady for the day, while the Oil, Natural Gas, Sugar, Cocoa, Copper, Orange Juice, Corn, Gold and Platinum markets tended softer for the day. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.28% lower to see this Index registered at 399.68. The day starts with the U.S. Dollar tending softer and selling at 1.562 to Sterling and 1.092 to the Euro, while North Sea Oil is steady in early trade and is selling at 48.55 per barrel. The London and New York markets opened the day yesterday with modest buoyancy and while the London market maintained buoyancy into the afternoon trade, the New York market moved back into modest negative territory. The New York market did however attract support at the lows and bounced back to join London in positive territory but this was short lived and as the afternoon progressed and with a weaker Brazil real coming into play, the New York market once again moved back into negative territory and while the London market maintained a positive stance. The New York market did however recover and once again join the London market within positive territory, to see both markets move on a modestly positive track for the rest of the day’s trade. The London market ended the day on a positive note and with 68.4% of the gains of the day intact, while the New York market likewise ended the day on a positive note and with 65.5% of the earlier gains of the day intact. This relatively steady close and with the dollar tending marginally softer is likely to inspire a follow through steady start for early thin trade today, against the prices set yesterday, as follows: LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb. SEP 1653 + 14 SEP 125.90 + 1.00 |
