The Coffee Exporters Association in Brazil Cecafé have reported that the country's green coffee exports for the month of September were 29.56% lower than the same month last year, to total 2.75 million bags, this number made up of 2.42 million bags of arabica coffee down 24.90% from the same month last year and 326,045 bags of Conilon robusta coffee down 51.79% from the same month last year.

The Coffee Exporters Association in Brazil Cecafé have since reported the cumulative exports of green coffee for the first three months of the current July 2021 to June 2022 Brazil coffee year, to be 22.48% lower, overall, when compared to the same time in the previous coffee year, at a total of 7.76 million bags.

The Vietnam Customs Authority have reported that Vietnam’s coffee exports for the month of September have registered 10.20% lower from the previous month, at 1,672,333 bags. This number is proving to be lower than the 2.00 million bags that had been initially forecast for the month’s coffee exports.

This sees the cumulative export performance from Vietnam, the largest producer of robusta coffee at 5.40% lower than the same period last year at a total 19,666,667 bags in the first nine months of the 2021 calendar year. The report also indicates that the coffee export revenue for the first nine months of 2021 calendar year is 3.40% higher than the same period last year at a total of around 2.20 billion US Dollars.

This sees the cumulative export figures for the October 2020 to September 2021 coffee year, from a Vietnam crop estimate of 28.10 million bags to have been 23,835,034 bags, total exports in the twelve-month period. This number made up of 96% robusta coffee, from this primarily robusta producing country.

Contrary to traditional assumptions that lower export figures from producer countries may indicate a lower coffee production year in the countries reporting, the lower export figures that are being reported by coffee producer countries of late, reflect in most instances the varying and continued challenges experienced in movement of cargo, container availability, space vessel space constraints. The escalating shortage and heightened demand for empty containers and vessel space, has seen freight costs on primary shipping routes, increase by anything from 525% to over 1000% in the past 18 months, in tandem with restriction of movement of people, manufacturing, commodities along all trade routes.

Apart from the initial impact of congestion on shipping lanes since the outset and arrival of Covid19, when vessels were at times being turned away from ports, or lockdowns within countries, creating bottlenecks and sudden routing alterations, export production turnover in some Asian markets registered a comparatively speedy economic recovery through 2020, where the uptick in production and export shipments through 2020, met by the largest consumer market trade partner economies stagnated in various degrees of lockdown. The devastating disruptions brought about by new Covid19 variants through this year, has continued to contribute toward the already severe situation and feed into a continuation of the disruptions to trade routes, backlog of containers in transhipment and destination ports, and an overall international lack of continuity in movement and lockdown strategies from country to country internationally, has seen movement of cargo continue to worsen. Further complications felt in United Kingdom and their main trading partner countries, through the implementation of Brexit and the challenges this presents for the movement of goods and services, within this relatively new trading policy environment.

There was some welcome news overnight meanwhile, with the continuation of the vessel equipment imbalance worldwide, that the USA Federal Government has placed a priority on clearing the container backlog and congestion in their primary and most problematic ports, though one might think that it will be some time before supply chains are able to clear the bottlenecks plaguing the logistics landscape worldwide.

The November-to-December contract arbitrage between the London and New York markets narrowed yesterday to register this at 111.90 usc/Lb. This equates to 53.63% 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 decrease by 2,216 bags yesterday, to register these stocks at 1,912,278 bags, with 95.32% of these certified stocks being held in Europe at a total of 1,822,806 bags and the remaining 4.68% being held in the USA at a total 89,472 bags. Of this, a total 1,046,975 bags, or 54.75% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 40.07% of these certified coffees, originating from Honduras. There was meanwhile an increase of 15,656 bags to the number of bags pending grading to the exchange; to register 52,900 bags pending grading on the day.

It was a mixed day on the commodity markets yesterday, with inflation expectations mixed amongst investors as well as concerns over global economic growth. The Gold, Silver, Palladium and Platinum markets ended the day on a positive note, while the Sugar, Cocoa, Coffee, Corn, Wheat and Soybean markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.366 Sterling, at 1.159 the Euro and with the US Dollar buying 5.513 Brazil Real.

The New York and London markets started the day yesterday trading on a modest near to par, positive note. The markets quickly started to attract a degree of selling pressure to see the markets set on a softer path for the remainder for the morning session. The markets hesitantly traded south of par before coming under severe selling pressure during the early afternoon session, pressured by long liquidation selling to accentuate the losses for the day’s trade. The markets rebounded from the lows of the day to recover some of the earlier in the day losses late in the day, to see both the New York and London markets settle on a negative note at the close.

The London market ended the day on a negative note and with 34.38% of the losses of the day intact, while the New York market ended the day on a likewise negative note and with 61.22% of the losses of the day intact. This softer close does little to indicate direction, albeit that the markets rebounded from the lows of the day, one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set yesterday, as follows:

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

NOV 2133 – 11                                                       DEC 208.65 – 4.50
JAN 2143 – 8                                                          MAR 211.60 – 4.45
MAR 2096 – 1                                                        MAY 212.55 – 4.35
MAY 2072 – 1                                                        JUL 213.10 – 4.25
JUL 2068 – 1                                                          SEP 213.35 – 4.20
SEP 2070 – 2                                                          DEC 213.45 – 4.20
NOV 2074 – 2                                                        MAR 213.65 – 4.20
JAN 2080 – 2                                                         MAY 213.90 – 4.20