The International Coffee Organisation ICO have reported that the global coffee exports for the month of January were 13.96% lower than the same month in the previous year, at a total of 9.70 million bags. This they say, has contributed to the cumulative global coffee exports for the first four months of the October 2022 to September 2023 coffee year to be 5.96% lower than the same period in the previous year, at a total of 39.90 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 2022 to September 2023 coffee year.  The International Coffee Organisation have likewise maintained their forecast for global consumption for the October 2022 to September 2023 coffee year, to grow 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 during January, registered at a 16% drop in exports when compared to the same month in the previous year, to register 2.86 million bags during January. There was, likewise a decrease in exports from Asia as Vietnam, India and Indonesia cumulatively registered a 17.20% decrease in exports, when compared to the same month in the previous year to total 3.45 million bags during January. Within the ICO report, exports for January were seen to have comparatively increased by 19.50% year on year from Africa to a total 1.11 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 January that exports were 5% lower than the same period in the previous year to total 1.21 million bags.

The weather in Brazil is reported to be conducive at the outset of March, with higher-than-average rainfall reported across the main coffee growing areas during February, assisting to increase the soil moisture levels during this peak summer period and with cherries set, these showers likely assisting further expansion. Weather forecasters are predicting rainfall to continue during the month of March, which would be considered seasonally normal for this time of year. Aside from inherent challenge that soft wet ground poses, for accessibility required and coffee inputs in affected isolated areas, this weather is likely to be viewed as mostly conducive. The Conilon robusta crop readies to begin harvest, while the biennial bearing arabica coffee crop continues to develop, rains are traditionally sought out, ahead of the usually anticipated mid-year harvesting to start in these areas.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 304 bags yesterday, to register these stocks at 786,721 bags, with 95.13% of these certified stocks being held in, Europe at a total of 748,429 bags and the remaining 4.87% being held in the USA at a total 38,292. Of this, a total 388,968 bags, or 49.44% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 47.27% of these certified coffees, originating from Honduras. There was meanwhile a 1,495 bags decrease to the number of bags pending grading to the exchange; to register 53,434 bags pending grading on the day.

The May 2023 to May 2023 contract arbitrage between the London and New York markets narrowed yesterday to register this at 83.32 usc/Lb. This equates to 45.73% 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.

It was a mixed overall on the commodity markets yesterday, with the leading in influence Oil market higher on the day, as the US Dollar index rose 0.5% ahead of key US Consumer Price data due to be released next week, with expectations of an interest rate hike to come. The London Robusta Coffee, Soybean, Wheat, Palladium and Platinum markets ended the day on a firmer note, while the New York Arabica Coffee, Cocoa, Corn, Sugar Silver and Gold markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.197 Sterling, at 1.061 the Euro and with the US Dollar buying 5.201 Brazil Real.

The New York market started the day yesterday trading to the north of par on a modest firmer note, while the London market started the day trading on a softer note. The New York market continued to oscillate to either side of par as the morning progressed, while the London market found support to trend firmer and make gains during the mid-morning session. As the afternoon progressed the London market hit a ceiling to limit the gains for the day, while the New York market was seen to drop back from the modest highs of the morning session and trend in a softer direction. The later afternoon session saw both the New York and the London markets continue to be pushed lower, pressured by selling in the market. The New York market recovered late in the day to see the market settle on a softer note at the close, while the London market recovered all of the losses to settle on a modest near to unchanged firmer note at the close.

The London market ended the day on a modest near to unchanged positive note with 30% of the earlier gains of the day intact, while the New York market ended the day on a negative note with 45% of the earlier losses of the day intact. This mixed but overall softer close for the markets, albeit that the New York market recovered most of the earlier losses of the day to settle on an overall softer note, does little to inspire confidence and one might think that the markets are due for a follow through hesitant start to early trade today, against the prices set yesterday, as follows:

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

MAY   2180 + 3                                       MAY   182.20 – 1.35
JUL     2166 + 5                                       JUL     181.40 – 0.75
SEP     2145 + 4                                       SEP     179.75 – 0.40
NOV   2108 + 2                                       DEC    177.70 – 0.45
JAN    2087 Unch                                    MAR   177.45 – 0.30
MAR  2081 Unch                                    MAY   178.00 – 0.25
MAY  2081 Unch                                    JUL      178.20 – 0.25
JUL    2087 Unch                                    SEP      178.40 – 0.20