In terms of value however the value of the November coffee exports was US$ 4,492,597.00 or 15.23% lower than the same month last year, at a total of US$ 25,002,230.00. This very much expected dip in value being related to the relatively soft reference prices of the international coffee exchanges against which prevail, which is countered by the corresponding weaker Uganda shilling to bring stability to the farm gate prices for the farmers. However there is inflation and while the exchange rate does bring relief to the farmers, the advantage of this factor is limited and it must be starting to impact upon the profit margins for the Ugandan coffee farmers.

The traditionally conservative Government Crop Supply Agency CONAB in Brazil has increased by 2.59% their assessment of the recently complete new Brazil crop, which they now peg at 43.24 million bags. This crop they say is related to a mix of 32.05 million bags of arabica coffee and 11.19 million bags of conilon robusta coffee. This CONAB figure is actually now significantly lower than many other private trade and industry assessments, but is significantly lower than most private trade and industry figures for the conilon robusta crop. While in terms of the their overall crop report that is traditionally in excess of 10% lower than the eventual evidence of coffee supply from the crop, they are well below the many trade and industry figures that are at around 48 million bags.

In the meantime the well-respected Brazilian analysts Safras e Mercado who have pegged the just completed new Brazil crop at 49.3 million bags, have estimated that farmers and cooperatives have so far sold 68% of their new crop coffees. This they say is well above the 63% factor sold, for the same time last year. Safras e Mercado have within the same report estimated that something in the order of 8% to 12% of the next 2016 crop has already been sold forward by the farmers to exporters, which would seemingly indicate that with farmers already fixing prices against the prevailing soft international prices, that many are not confident in even a medium term recovery for the coffee markets.

Following the Coffee Board of India’s forecast for a record new October 2015 to September 2016 new crop of 5,833,334 bags, there have been comments from the coffee planters within India towards this forecast that it might be excessive. In this respect they refer to the point to the excessive post monsoon period rains in southern India, which they say might be negative to the potential for the output from the arabica coffee farms in the country.

The March on March contracts arbitrage between the markets narrowed yesterday, to register this at 49.90 usc/Lb., while this equates to a 42.18% 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 in more volume upon the fortunes of the London market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 15,167 bags yesterday; to register these stocks at 1,762,404 bags. There was meanwhile a smaller in volume 12,413 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 43,123 bags.

There was no report on the Certified Robusta coffee stocks held against the London market were seen to remain unchanged as at Friday 11th. December; to see these stocks registered at 3,321,333 bags.

The commodity markets and with the renewed muscle of the U.S. dollar having an impact were generally soft in trade yesterday, with the overall macro commodity index continuing on a downside track. The Sugar and Soybean markets had a day of buoyancy and the Natural Gas market was steady, while the Oil, Cocoa, Coffee, Cotton, Copper, Orange Juice, Wheat, Corn, Gold, Silver and Platinum markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.07% lower to see this Index registered at 368.33. The day starts with the U.S. Dollar showing a degree of follow through buoyancy in early trade and trading at 1.492 to Sterling and 1.084 to the Euro, while North Sea Oil is steady in early trade and is selling at 36.05 per barrel.

The London and New York markets had a relatively steady start for early trade yesterday, with both markets maintaining a degree of buoyancy into the early afternoon trade. However as the afternoon progressed the New York market started to lose its way and fall back below par, while the London market saw it gains being eroded and with the New York market softening further later in the afternoon, the London market finally joined the negative track and fell back into modest negative territory. There was nevertheless a degree of support coming to the fore for both markets and to limit the losses and to take the markets on a sideways negative track for most of the rest of the day. The London market ended the day on a softer note and with 70% of the losses of the day intact, while the New York market ended the day on a soft note and with 50% of the earlier losses of the day intact. With the charts tending negative this close does little to inspire and one might expect to see little better than a cautiously near to steady start for early trade today against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                NEW YORK ARABICA USc/Lb.

JAN 1482 – 4                                             DEC    117.80 – 0.30
MAR 1508 – 7                                          MAR    118.30 – 0.95
MAY 1536 – 8                                         MAY     120.55 – 0.95
JUL 1562 – 9                                             JUL      122.65 – 0.90
SEP 1583 – 10                                           SEP      124.60 – 0.90
NOV 1603 – 11                                        DEC      127.45 – 0.75
JAN 1621 – 11                                         MAR     130.15 – 0.70
MAR 1641 – 11                                       MAY     131.80 – 0.70
MAY 1663 – 11                                        JUL      133.40 – 0.65
JUL 1690 – 13                                           SEP      134.80 – 0.55