|The Uganda Coffee Development Authority has reported that the country’s coffee exports for the month of July were 89,077 bags or 28.34% higher than the same month last year, at a total of 403,381 bags. This improve performance does however follow many months of relatively modest export volumes and the countries cumulative coffee exports for the first ten months of the present October 2014 to September 2015 coffee year are still 172,828 bags or 5.72% lower than the same period in the previous coffee year, at a total of 2,851,045 bags.
In terms of value however the Ugandan coffee exports for the first ten months of the present October 2014 to September 2015 coffee year are still US$ 14,186,978.00 higher or 4.24% than the same ten months in the previous coffee year, at a total of US$ 348,939,624.00. This is even more impressive in terms of the U.S. dollar now earning over 25% more Uganda Shillings than it did at the end of the last coffee year, which means that in terms of domestic currency the countries coffee farmers are still in receipt of a much improved income in domestic currency for their marginally lower sales volumes during the present coffee year.
The largest coffee cooperative in Brazil Cooxupe have reported that despite incoming early rains and the prospects for a good spring and summer rain season for the last quarter of this year and most probably for the first quarter of next year, that this will not eliminate the damage caused by the past two years of dry spell damage and that it will not result in a bumper new 2016 crop. But rather the positive effects of the rains will only prove to be beneficial for the prospects of the follow on 2017 crop, which should with unforeseen weather problems aside, be a good crop.
Many might however question such a prediction, as coffee trees are resilient and stress can be beneficial with the coming of the rains for good flowerings and so long as the rains continue, a good carry of crop from these flowerings. Thus with the recent month of dry weather and building stress, one might rather foresee that the rains so long as they are as forecasted and shall be less frequently interrupted from October 2015 to April 2016, will be very positive for the prospects for the 2016 Brazil crop.
Rabobank and with the close to completed new Brazil crop in mind, have forecasted that world coffee supply for the forthcoming October 2015 to September 2016 coffee year shall be in deficit by a relatively modest 1.9 million bags. This with fair world stocks in hand is not very supportive news for the market and would indicate that there is no reason for any concern on the part of the consumer market industries, who continue to take a slow and steady stance with their buying activities.
Vietnam in a bid to value add upon their relatively inexpensive mostly robusta coffee exports, is steadily building up its production capacity of soluble coffees. In this respect a report yesterday and based on data from the Agricultural Ministry, has estimated that Vietnam shall have exported as much as 78,000 metric tons of instant coffee, for the present October 2014 to September 2015 coffee year. This volume the report says, is a 44% increase on the previous year.
The arbitrage between the markets narrowed yesterday to register this at 47.29 usc/Lb., while this equates to a 39.23% price discount for the London robusta coffee market. This arbitrage remaining relatively attractive to roasters in comparison to arabica coffee prices, but is perhaps due to widen further in time and when Vietnam stocks start to impact upon the fortunes of the London market.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 3,949 bags yesterday; to register these stocks at 2,089,150 bags. There was meanwhile a larger in volume 9,399 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 22,623 bags.
The commodity markets had a better day yesterday and with many markets seemingly having bottomed out, to see the overall macro commodity index steady for the day. The Oil, Natural Gas, Sugar, Cocoa, Copper and Soybean markets had a day of buoyancy and the Orange Juice market was steady, while the Coffee, Cotton, Wheat, Corn, Gold, Silver and Platinum markets had a softer day’s trade. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 0.05% higher to see this Index registered at 385.77. The day starts with the U.S. Dollar near to steady and selling at 1.570 to Sterling and 1.147 to the Euro, while North Sea Oil is near to steady in early trade and is selling at 41.75 per barrel.
The London and New York markets started the day yesterday with the New York market showing buoyancy and the London market relatively steady around par and with both markets maintaining this track into the afternoon trade. As the afternoon progressed the New York market came under pressure and dipped back to below par and likewise the London market, but with both markets attracting sufficient support to remain only marginally below par for a while, before losing more weight. This remained the track for the rest of the day and with the New York market trading at one and half year lows, to see both markets closing off on a soft note. The London market ended the day with 70.6% of the losses of the day intact, while the New York market ended the day with 88.5% of the earlier losses of the day intact. Despite the soft close and its negative influence upon the charts, one might foresee that the prices are encouraging for the consumer industries and that there might well be another steady start due for early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
SEP 1582 – 17 SEP 117.05 – 0.45