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

Coffee Market Report

29 May 2020

With the month of May coming to a close and with the shipment statistics already at hand, the Vietnam General Statistics office have estimated that the coffee exports for the month of May shall be approximately 2,166,667 bags.  This they say, shall result in the countries coffee exports for the first five months of this year to be 4.7% higher than the same period last year, at a total of 13,550,000 bags.

The General Statistics office of Vietnam have at the same time estimated that the value of the country’s coffee exports for the first five months of this year, shall be 2.9% higher than the same period last year, at a total of approximately 1.37 billion U.S. dollars.   Although the Vietnamese Government enforced a countrywide lockdown in early April, for the most part within the coffee and other agricultural sectors within the country and barring a small degree of disruption to the flow of goods from the interior, generally business has taken place as usual throughout the month of May.

The Ivory Coast as west Africa’s leading robusta coffee producer, have reported that their coffee exports for the month of April were 73,333 bags or 54.97% lower than the same month last year, at a total of 60,083 bags. This has contributed to their country’s cumulative coffee exports for the first four months of 2020 to be 75,800 bags or 19.35% lower than the same period last year, at a total of 315,950 bags.

The July to July contracts arbitrage between the London and New York markets narrowed yesterday; to register this at 45.7 usc/Lb. This equates to 46.12% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 3,952 bags yesterday; to register these stocks at 1,778,195 bags, with 90.9% of these certified stocks being held in Europe at a total of 1,614,196 bags and the remaining 9.1% being held in the USA at a total of 160,047. There was no change to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,985 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to decrease by 33,000 bags over the weeks of trade leading up to Monday 25th May, to see these stocks registered at 2,137,167 bags, on the day.

The commodity markets were slightly firmer in trade yesterday, to see the overall macro commodity index taking a sideways track for the day. The Sugar and Cocoa markets ended the day on a positive note, while the Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.1306% higher; to see this index registered at 354.2973. The day starts with the U.S. Dollar steady, trading at 1.234 to Sterling, at 1.110 to the Euro and with the US Dollar buying 5.405 Brazilian Real.

The London and New York markets started the day yesterday trading on modest positive note, both markets continued on a positive track into the early afternoon trade. As the afternoon progressed both markets attracted selling pressure to limit the gains for the day and to move onto a negative track for the afternoon trade, both the London and New York markets continued to trade on this negative track to see the markets close on a very soft note for the day.

The London market ended the day on a negative note and with 97.06% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note 86.08% of the earlier losses of the day intact. This very soft close does little to indicate direction, with the New York market dropping back substantially late in the day, one might think the markets are possibly due for little better than a hesitant steady start to early trade today, against the prices set on yesterday, as follows:

LONDON ROBUSTA US$/MT                                    NEW YORK ARABICA USc/Lb. 

JUL    1177 – 33                                                                  JUL     99.10 – 3.40
SEP    1199 – 33                                                                  SEP   100.90 – 3.30
NOV   1220 – 33                                                                 DEC   103.20 – 3.15
JAN    1240 – 34                                                                  MAR  105.45 – 2.95
MAR   1262 – 33                                                                 MAY  106.95 – 2.75
MAY 1284 – 33                                                        JUL 108.30 – 2.65
JUL 1306 – 34                                                          SEP 109.50 – 2.65
SEP 1325 – 33                                                          DEC 111.05 – 2.65