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

Coffee Market Report

02 Mar 2022

The National Coffee Institute of Honduras (IHCAFE) have reported preliminary data that the country’s coffee exports for the month of February were 19,832 bags or 3.09% higher than the same month last year, at a total of 661,580 bags. This they say has contributed to the cumulative coffee exports for first five months of the October 2021 to September 2022 coffee year to be 263,210 bags or 18.99% higher than the same period in the previous coffee year, at a total of 1,648,858 bags.

The May 2022 to May 2022 contract arbitrage between the London and New York markets widened yesterday to register this 141.47 usc/Lb. This equates to 59.95% 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 7,390 bags yesterday, to register these stocks at 996,779 bags, with 94.26% of these certified stocks being held in Europe at a total of 939,540 bags and the remaining 5.74% being held in the USA at a total 57,239. Of this, a total 409,306 bags, or 41.06% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 49.01% of these certified coffees, originating from Honduras. There was meanwhile 24,350 bags decrease to the number of bags pending grading to the exchange; to register 60,785 bags pending grading on the day.

It was a firm day on the commodity markets yesterday, the leading in influence energy and oil sector jumping upward in reaction to the conflict in Ukraine. The Sugar, New York Arabica Coffee, Corn, Wheat, Soybean, Gold, Silver, Platinum and Palladium market ended the day on a firmer note, while the Cocoa and London Robusta Coffee markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.330 Sterling, at 1.111 the Euro and with the US Dollar buying 5.160 Brazil Real.

The New York and London markets started the day yesterday trading on a firmer note, with both markets attracting a degree of buying support early in the day soon after the open to see the markets track firmer for the remainder of the morning session. The markets would hit a ceiling limiting the gains for the day which saw both the New York and London market drop back and set on a softer path into the afternoon session. As the afternoon progressed the markets continued on this softer path.  

The markets weighed by selling pressure continued to trend softer before hitting a floor to limit the losses for the day which saw the markets rebound from the lows of the day. The New York market was seen to settle on a firmer note at the close, while the London market recovered most of the losses of the day to settle on a modest near to unchanged softer note at the close.

The London market ended the day on a negative note with 50% of the earlier losses of the day intact, while the New York market ended the day on a positive note with 49.60% of the earlier gains of the day intact. This mixed but overall firmer close for the markets might inspire some degree of follow through confidence to possibly set the markets for a steady start to early trade today, against the prices set yesterday, as follows:

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

MAY 2084 – 6                                            MAY 236.00 + 3.10
JUL 2055 – 16                                            JUL 234.50 + 2.95
SEP 2052 – 17                                            SEP 233.15 + 3.10
NOV 2049 – 19                                          DEC 231.15 + 3.25
JAN 2046 – 22                                           MAR 228.85 + 3.15
MAR 2042 – 24                                         MAY 227.00 + 3.05
MAY 2042 – 24                                         JUL 224.65 + 3.10
JUL 2043 – 24                                           SEP 221.85 + 3.10