Coffee Market Report October 03 2019

The International Coffee Organisation ICO have reported that the global coffee exports for the month of August were 4% lower than the same month last year, at a total of 10.45 million bags. This they say, has contributed to the cumulative global coffee exports for the first eleven months of the present October 2018 to September 2019 coffee year to be 9.2% higher than the same period in the previous coffee year, at a total of 120.28 million bags. 

The same ICO report has estimated that global coffee consumption will have risen for this present October 2018 to September 2019 coffee year to 164.82 million bags, which is well below what they estimate to be the coffee supply for this coffee year. However, they estimate that global coffee consumption is rising by approximately 2.1% per annum and in this respect, would indicate that global coffee consumption for the coming October 2019 to September 2020 coffee year shall exceed 168 million bags. 

The National Coffee Institute of Costa Rica have reported that the country’s coffee exports for the month of September were 40% lower than the same month last year, at a total of 24,312 bags. This number has contributed to the cumulative coffee exports for the October 2018 to September 2019 coffee year to be 12.8% lower than the same period in the previous coffee year, at a total of 1.06 million bags. 

The December to January contracts arbitrage between the New York and London markets narrowed yesterday; to register this at 40.64 usc/Lb.  This equates to 40.40% 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 4,466 bags yesterday; to register these stocks at 2,267,694 bags.  There was an increase to the number of bags pending grade to this exchange, by 3,902 bags; to register these pending grading stocks at 33,186 bags. 

The commodity markets were mixed in trade yesterday, to see overall macro commodity index taking a sideways track for the day. The Sugar, Cocoa, Cotton, Copper, Orange Juice, Gold and Silver markets ended the day on a positive note, while the Oil, Natural Gas, Coffee, Wheat, Corn and Soybean markets ended the day on a softer note.  The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.083% lower; to see this index registered at 394.93.   The day starts with the U.S. Dollar steady and trading at 1.229 to Sterling, at 1.096 to the Euro and with the US Dollar buying 4.128 Brazilian Real. 

The London and New York markets started the day yesterday trading around par, to see both markets taking a modest negative track into the early afternoon trade. As the afternoon progressed both markets briefly dipped back to trade around par, but to see both the London and the New York markets remain on a softer track for the day. 

The London market ended the day on a modest negative note, and with 70% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, and with 62.5% of the earlier losses of the day intact. This softer close for the markets is unlikely to inspire confidence and one would expect the markets are only due for a near to steady start to early trade today, against the prices set yesterday, as follows:   

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

NOV   1304 – 7                                                      DEC    100.60 – 0.75

JAN    1322 – 8                                                      MAR   104.20 – 0.75

MAR   1345 – 8                                                      MAY   106.50 – 0.75

MAY   1369 – 7                                                      JUL    108.55 – 0.80

JUL    1392 – 7                                                      SEP    110.50 – 0.85

SEP    1416 – 7                                                      DEC   113.35 – 0.80

NOV   1441 – 7                                                      MAR   116.15 – 0.85

JAN    1467 – 7                                                      MAY   117.95 – 0.90

MAR   1491 – 7                                                      JUL    119.70 – 0.95