The Coffee Exporters Association in Brazil Cecafé have reported that the countries green coffee exports for the month of May were 90.12% higher than the same month last year, to total 4.03 million bags, this number made up of 3.16 million bags of arabica coffee up 59.13% from the same month last year and 868,270 bags of Conillon robusta coffee up 559.33% from the same month last year.

The Coffee Exporters Association in Brazil, Cecafé have also reported the cumulative exports of green coffee for the first eleven months of the current July 2023 to June 2024 Brazil coffee year, to be 33.46% higher, overall, when compared to the same time in the previous coffee year, at a remarkable total of 39.37 million bags. This marking the highest level of exports recorded during the first eleven months of the Brazil seasonal July to June coffee year, and in record terms marginally exceeding the cumulative eleven-month export figure recorded during the bumper record crop production year in 2020/21 coffee year, which was reported at 38.87 million bags.

The respected United States Department of Agriculture Foreign Agriculture Service (USDA) have reported that coffee production in Kenya for the coming October 2024 to September 2025 coffee year shall be 50,000 bags or 6.25% lower than the current year, to total 750,000 bags., noting that this will be for a country that some 40 years ago used to produce in excess of 2 million bags per annum. Of this new crop, the forecast is that Kenya will export 4.00% less than the current coffee marketing year at a total of 720,000 bags of green coffee. Internal Consumption within Kenya is forecast to grow by 5.45% during the coming 2024/25 year, albeit from a low base, to reach 58,000 bags. This growth primarily seen in the out of home tourism and hospitality sectors.

Within the context of global coffee consumption and contributing macro-economic factors, there remains a key focus on the monetary policy of central banks around the globe. The European Central Bank and the Bank of Canada are the first central banks to action interest rate cuts this year, as inflation has subsided to controllable levels, with others expected to follow. This will be a welcome sign to consumers who have experienced tight economic pressure from the rising cost of living. Although one might argue that these interest rate cuts will take some time to reflect in consumer spending. This as the mature coffee markets in Europe, Japan, Canada and the United States are heading into their traditionally slower coffee roasting activity summer months.

Given the more positive global economic outlook, global coffee consumption is forecast to see growth during the coming October 2024 to September 2025 coffee year, while not what one might consider to be a more traditional 2% to 3% growth year on year, is an overall global coffee consumption increase that is forecast by many independent forecasters at an average of around 0.95% growth from the previous year, to possibly reach a total 171.50 million bags in the coming 2024/25 coffee year. This growth is primarily driven by relatively new coffee consumer markets and producer countries such as China, India, Indonesia, the Middle East and Vietnam who have registered increased internal coffee consumption, as well as growth within the value-add sector. Albeit that coffee consumption is developing from a low base within many of these markets.

The Certified washed Arabica coffee stocks held against the New York arabica market were seen to remain unchanged yesterday, to register these stocks at 799,038 bags, with 99.30% of these certified stocks held in, Europe at a total of 793,449 bags and the remaining 0.70% being held in the USA at a total 5,589 Bags. Of this, a total 407,867 bags, or 51.04% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 15.92% of these certified coffees, originating from Honduras. The pending grading stocks were seen to increase by 16,705 bags; to register 57,382 bags pending grading on the day.

The Certified Robusta coffee stocks held against the London Exchange were seen to increase by 102,333 bags during the week up to the 10th. June 2024, to register a total of 928,500 bags, with Brazil Conillon accounting for over 90% of coffee held against the London Exchange

The July 2024 to July 2024 contract arbitrage between the London and New York markets widened yesterday, to register this at 30.22 Usc/Lb. This equates to 13.70% price discount for the London Robusta coffee.

It was a mixed day on the commodity markets yesterday, as the US Dollar gained momentum on the day. A newly released Reuters poll taken by a number of prominent economists indicates that the US Federal Reserve will start with their rate cutting cycle in September this year, with the consensus that a 25-basis point interest rate cut is on the cards. The Cocoa, Sugar, Wheat and Gold markets ended the day on a positive note, while the Coffee, Corn, Soybean, Silver, Platinum and Palladium markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.274 Sterling, at 1.074 the Euro and with the US Dollar buying 5.366 Brazil Real.

The New York and London markets started the day yesterday trading to the south of par on a modest softer notes, carrying through pressure from the close on Monday. The markets oscillated to either side of par for the remainder of the early morning session. The late morning session saw the New York market attract some degree of buying support to trend firmer, while the London followed suit albeit in a more sedate manner. As the afternoon progressed, the markets continued to trend in a firmer direction, before hitting a ceiling during the mid-afternoon session to limit the gains for the day. The markets dropped back from the earlier modest highs, weighed by selling in what was mainly technical trade to see the New York market drop back below par, with the London market also dropping below par to trend in a softer direction for the remainder of the days session. The markets continued on a downward trajectory, accentuating the losses along the way. The selling activity started to wane toward the end of the days’ trade, to see the New York market recover most of the earlier losses of the day, while the London market recovered some of the earlier losses of the day. This saw both the New York and the London market settle in negative territory although above the lows on the day, in both markets.

The London market ended the day on a negative note with 71.43% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, with 33.33% of the earlier losses of the day intact. This follow through modest softer close for the markets, with the New York market recovering most of the earlier losses of the day to settle near to unchanged on the day and the London market recovering some of the earlier losses of the day might indicate some degree of direction to possibly see the markets set for a hesitant steady start to early trade today, against the prices set yesterday, as follows:

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

JUL     4196 – 40                                         JUL    220.55 – 0.85
SEP     4053 – 29                                         SEP    221.45 – 0.55
NOV   3902 – 23                                         DEC   220.40 – 0.50
JAN    3735 – 24                                         MAR  219.30 – 0.45
MAR  3605 – 18                                         MAY   218.00 – 0.50
MAY  3524 – 19                                         JUL     216.85 – 0.60
JUL    3454 – 19                                         SEP     215.45 – 0.60
SEP    3364 – 17                                         DEC    213.85 – 0.60