The International Coffee Organisation ICO have reported that the global coffee exports for the month of April were 2.83% lower than the same month in the previous year, at a total of 10.93 million bags. This they say, has contributed to the cumulative global coffee exports for the first seven months of the October 2021 to September 2022 coffee year to be 0.64% higher than the same period in the previous year, at a total of 78.02 million bags.

The International Coffee Organisation ICO have maintained their forecast for global coffee supply at 2.10% lower than the previous year at a total of 167.20 million bags for the October 2021 to September 2022 coffee year. The International Coffee Organisation have likewise maintained their forecast for global consumption for the October 2021 to September 2022 coffee year, to increase by 3.30% from the previous year to reach a total of 170.30 million bags.

The ICO reported a decrease in exports from Brazil, who have registered a 18.00% decline in exports when compared to the first seven months of the previous October 2020 to September 2021 coffee year. This due to biennially bearing nature of the Brazil coffee crop and the 2021/22 coffee year, a biennial lower bearing cycle. This along with the contributory factor of heightened logistical challenges for containers, vessel and space, from this key agricultural production exporter to the world.

There was an increase in exports from Asia as Vietnam, India and Indonesia cumulatively registered a 9.00% increase in exports, when compared to the same seven months of the previous coffee year to total 28.06 million bags. Within the ICO report, exports for the first seven months of the current October 2021 to September 2022 coffee year were seen to have decreased marginally by 2.26% year on year from Africa to a total 7.35 million bags.

The ICO report similarly includes within the total global exports, the export figures, from Mexico and the traditional washed arabica Central American bloc; Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador, to report for the month of April that coffee exports were relatively unchanged from the previous year to register at 2.10 million bags. With the region’s largest producer Honduras reporting a marginal drop in exports during April this year when compared to the previous year to register total exports at 750,000 Bags. These exports for the month of April balanced in part by higher export figures from earlier in the coffee year to report that for the first seven months of the current October 2021 to September 2022 coffee year exports posted an increase of 4.70% to a total 8.60 million bags. News continues to come from this key washed arabica producer bloc meanwhile, to confirm that the coffee flow has not been what was initially forecast ahead of the harvests. This factor together with the news of the anticipated reduction of crop potential to come from Colombia, that is similarly being reported by both coffee authorities and independent forecasters, would indicate that there is likely to be a tightening of supply of these quality coffees to consumer markets in the months to come, which is not only related to the continuation of shipping congestion and logistical challenges.

Safras & Mercado have estimated that almost 18% of the new Brazil coffee crop has already been harvested. The harvest this year is at a slower pace, when compared to the 5-year average at the same time, which is at approximately 23%. Based on the forecast for a new crop of 61.10 million bags, the report would indicate that so far approximately 11 million bags of the new crop have been harvested. The coffee made up of around 6 million bags of Conilon Robusta coffee, which begin harvest earlier in the seasonal year, and approximately 5 million bags of arabica coffee harvested thus far. It is expected that the harvest will start to speed up during the day to come under favourable weather conditions for harvesting.

The July 2022 to July 2022 contract arbitrage between the London and New York markets narrowed yesterday to register this at 141.36 usc/Lb. This equates to 59.33% price discount for the London Robusta coffee market. This wide arbitrage may be viewed by price sensitive roasters as an attractive alternative discount for Robusta against the comparatively higher value arabica coffee.

Today sees the UK celebrate the Platinum Jubilee Bank Holiday, this shall see the London Robusta Market closed for the day, leaving the New York market to trade solo for a shortened day of trade.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 13,263 bags yesterday, to register these stocks at 1,030,616 bags, with 95.52% of these certified stocks being held in Europe at a total of 984,407 bags and the remaining 4.48% being held in the USA at a total 46,209. Of this, a total 513,071 bags, or 49.78% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 41.23% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 7,800 bags pending grading on the day.

It was an overall firmer day on the commodity markets yesterday, as the US Dollar lost ground on the back of lower than expected US Jobs data for the month of May, underscoring the inflationary environment that is being experienced. The Soybean, Wheat, Gold, Silver, Palladium and Platinum markets ended the day on a positive note, while the New York Coffee, Sugar, Cocoa and Corn markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.257 Sterling, at 1.075 the Euro and with the US Dollar buying 4.797 Brazil Real.

The New York market trading solo for a shortened day of trade yesterday started the day trading on a modest softer note, the market quickly supported by some degree of follow through buying support to see the markets trend in a firmer direction early in the day. This saw the New York market hit a ceiling, to limit the gains for the day during the early morning session. The market dropped back from this early morning high to trend in a softer direction, weighed by selling for the remainder of the day’s session. As the afternoon progressed the New York market continued to be driven lower by some degree of mostly speculative selling activity and the market hit a floor late in the day. The New York market would soon rebound from these lows to see the market settle on a softer note at the close. Monday is Pentecost or Whit Monday holiday for many countries and including many of the Western European countries, which may dampen physical coffee trade for the day.

The London market ended the day on Wednesday on a positive note with 81.08% of the earlier gains of the day intact, while the New York market ended the day yesterday on a negative note with 48% of the earlier losses of the day intact. This softer close for the New York market trading solo on the day, does little to indicate direction albeit that the market recovered some of the earlier losses of the day., to possibly set the New York market for a hesitant start to early trade today, against the prices set yesterday, as follows:

LONDON ROBUSTA US$/MT                NEW YORK USC/LB.
Close: 01/06/2022                                      Close: 02/06/2022

JUL 2136 + 30                                            JUL 238.25 – 1.20
SEP 2139 + 29                                            SEP 238.25 – 1.15
NOV 2128 + 28                                          DEC 237.40 – 1.05
JAN 2112 + 26                                           MAR 235.60 – 0.95
MAR 2106 + 26                                         MAY 233.55 – 0.95
MAY 2099 + 26                                         JUL 231.15 – 0.90
JUL 2095 + 26                                           SEP 228.45 – 0.90
SEP 2087 + 26                                          DEC 225.90 – 1.00