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

Coffee Market Report

29 Apr 2021

With the month of April drawing to a close, the Vietnam General Statistics office have estimated that the coffee exports for the month of April will be 34.20% lower than the same month last year, at a total of approximately 1,833,333 bags.  This they say, will result in the country’s coffee exports for the first four months of this calendar year to be 17.60% lower than the same period last year, to an estimated total 9,383,333 bags.

The General Statistics office of Vietnam have at the same time estimated that the value of the country’s coffee exports for the first four months of this year, shall be 11.60% lower than the same period last year, at a total of approximately 1.02 billion US Dollars.

The July-to-July contract arbitrage between the London and New York markets narrowed yesterday; to register this at 79.26 usc/Lb. This equates to 54.35% price discount for the London Robusta coffee market. This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 9,920 bags yesterday, to register these stocks at 1,918,545 bags, with 95.15% of these certified stocks being held in Europe at a total of 1,825,412 bags and the remaining 4.85% being held in the USA at a total 93,133 bags. Of this, a total 968,440 bags, or 50.48% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.71% of these certified coffees, originating from Honduras. There was a decrease in the number of bags pending grading to the exchange, by 1,925 bags; to register these pending grading stocks at 75,850 bags.

It was a mixed day on the commodity markets yesterday, the awaited US Federal Reserve Bank announcements providing little to indicate a foreseeable change in prevailing economic policy or interest rates. The US Dollar eased on the day against a basket of other currencies. It was a positive day for Oil markets, a mildly positive day for Gold, speculatively influenced profit taking was evident following the recent surge across the commodity sector, a softer day for Corn, Cocoa, Wheat, Sugar, Soybean markets. Silver steady, Platinum and Palladium mildly softer on the day. The day starts with the U.S. Dollar trading at 1.3952 Sterling, at 1.2132 the Euro and with the US Dollar buying 5.3425 Brazil Real.

The coffee markets started the day on a softer note yesterday, the early morning session trending below par, with light speculative activity on either side of the market. The morning session continued in choppy trade, attempts to break through to positive territory in New York matched by resting seller activity at the top in comparatively light volume. The New York and London markets tracked upward as speculative buying activity met with modest origin and speculative selling activity toward midsession, when the ceiling broke and speculative buyers once again took the floor. The latter half of the session trading in positive territory with the conflicting influence of the Brazil Real which registered a stronger day against the US Dollar, along with the overall speculatively driven profit taking across the commodities sector. The markets finished the day on a mildly positive trajectory having recovered the ground lost during the session, to register a positive close on the day in London, and a steady close near to unchanged in New York and near to the highs in both markets after a fair volume day, to set the close yesterday, as follows:

LONDON ROBUSTA US$/MT NEW YORK USC/LB.

JUL   1468 + 7                            JUL   145.85 – 0.05
SEP   1489 + 6                            SEP   147.80 Unch
NOV 1506 + 7                            DEC  150.05 + 0.05
JAN   1520 + 8                           MAR 151.85 + 0.15
MAR 1534 + 8                           MAY 152.45 + 0.15
MAY 1550 + 7                            JUL  152.70 + 0.20
JUL   1566 + 7                            SEP  152.70 + 0.15
SEP   1580 + 7                            DEC 152.75 + 0.25