I. & M. Smith (Pty) Ltd. since 1915
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I. & M. Smith (Pty) Ltd.

Coffee Market Report

03 Sep 2020

The National Coffee Institute of Costa Rica have reported that the country’s coffee exports for the month of August were 72.40% higher than the same month last year, at a total of 98,343 bags. This they say has contributed to the cumulative coffee exports for the first eleven months of the present October 2019 to September 2020 coffee year to be 3.98% higher than the same period in the previous coffee year, at a total of 1,079,074 bags. This large increase in exports has been attributed to a 11.5% increase in production when compared to the same period last year.

The National Coffee Institute of Honduras (IHCAFE) have reported that the country’s coffee exports for the month of August were 42.40% lower than the same month last year, at a total of 156,922 bags. This they say has contributed to the cumulative coffee exports for the first eleven months of the present October 2019 to September 2020 coffee year to be 17.80% lower than the same period in the previous coffee year, at a total of 5,392,551 bags.

The November to December contract arbitrage between the London and New York markets broadened yesterday; to register this at 65.98 usc/Lb. This equates to 50.25% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 21,731 bags yesterday to register these stocks at 1,210,011 bags, with 93.8% of these certified stocks being held in Europe at a total of 1,135,540 bags and the remaining 6.2% being held in the USA at a total of 74,471 bags. There is meanwhile no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,564 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 11,500 bags over the weeks of trade leading up to Monday 31st. August, to see these stocks registered at 1,829,500 bags, on the day.

It was a softer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a downward track for the day. The Cocoa market ended the day on a positive note, while the Sugar and Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.0014% lower; to see this index registered at 414.7523. The day starts with the U.S. Dollar steady, trading at 1.330 to Sterling, at 1.180 to the Euro and with the US Dollar buying 5.341 Brazilian Real.

The New York and London markets started the day yesterday trading on a close to par soft note, both markets continued on this softer path into the early afternoon trade. As the afternoon progressed both the London and the New York markets attracted a small degree of support to see the markets trend positive, however this was short lived as both markets closed on a soft note, albeit a modest soft note for the New York market.

The London market ended the day yesterday on a negative note and with 76.67% of the earlier losses of the day intact, while the New York market ended the day yesterday on a likewise modest soft note and with 5% of the earlier losses of the day intact. This softer close does little to indicate direction and one might think the markets are due for 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.

SEP 1530 – 24                                                                     SEP 131.50 – 0.40
NOV 1440 – 23                                                                   DEC 131.30 – 0.10
JAN 1448 – 23                                                                    MAR 131.80 + 0.05
MAR 1460 – 23                                                                  MAY 132.65 Unch
MAY 1473 – 23                                                                  JUL 133.45 Unch
JUL 1486 – 24                                                                    SEP 134.10 Unch
SEP 1498 – 24                                                                    DEC 134.80 – 0.10
NOV 1511 – 24                                                                  MAR 135.60 – 0.10