The Coffee Exporters Association in Brazil, Cecafé have reported that the countries green coffee exports for the month of January 2021 were 7.88% lower than the same month in the previous year, to total 2.89 million bags, this number made up of 2.65 million bags of arabica coffee, reported lower by 9.28% from the same month last year and 241,534 bags of Conilon robusta coffee up 7.91% from the same month last year. This lower export number in January, follows on from record exports in October, November and December that is related to the current record harvest, each of these months exceeded exports of 4 million bags per a month.
The Coffee Exporters Association in Brazil Cecafé have since reported the cumulative exports of green coffee for the first seven months of the July 2020 to June 2021 Brazil coffee year, to be 23.59% higher, than the same period in the previous coffee year and a cumulative total export registered at 25.36 million bags. This large increase in reported exports for the first seven months of the current July 2020 to June 2021 coffee year can be attributed to the biennially bearing larger, record production harvested in the 2020/21 coffee year.
The preparation ahead of the festivities for this year meanwhile, to bring in the year of the Buffalo on the 12th February, is well underway. These annual Tet New Year holidays are due to start today within Vietnam, and are generally considered to see most commercial activity within the country closed for the duration of these celebrations, starting today and through to Wednesday next week. This is likely to limit trade activity along with producer price fixation selling volumes on the London futures market, to leave the rudder of the market, very much in the hands of the funds and speculative sectors of the market through to the second half of next week.
The Vietnam harvest for the October 2020 to September 2021 coffee year, is complete. Ahead of this, the general estimate consensus for 28 million bags of robusta coffee production and a nominal, in comparable volume terms 1 million bags of arabica coffee for this current crop, for which exports are already underway.
The Vietnam Customs Authority had meanwhile reported a 10.20% increase in exports during January 2021 this year, to total 2,676,917 bags when compared to the same month in the previous year. This reported increase despite the very real shipment container, space and vessel availability issues that are being experienced throughout the region and in this country, would seem at first glance somewhat of an anomaly. The comparative months year on year however, are related to the Tet Lunar New Year falling into January last year, for the first time in some years, instead of the more usual timing of these celebrations that generally fall into the calendar month of February, each year.
The export figures estimated from Vietnam in this short month therefore, with the Lunar New Year preparations well underway, may be anticipated to see the end of February month export figures to be reported lower month on month against the same time last year. This, in addition to the prevailing complicated bottleneck and backlog of coffee and other commodity exports from Vietnam to consumer markets, as the escalating situation of limited equipment and shipment availability, that is currently being experienced. The Vietnam Customs Authority have thus far reported cumulative exports for the first four months of this current October 2020 to September 2021 coffee year which also experienced a delayed start to the harvest, to be 1,559,726 bags or 24.55% higher than the same four months of in the year before, at a total of 7.92 million bags.
The March 2021 to March 2021 contract arbitrage between the London and New York markets narrowed yesterday: to register this at 62.08 usc/Lb. This equates to 50.49% price discount for the London Robusta coffee market.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to increase by 13,050 bags yesterday, to register these stocks at 1,675,880 bags, with 94.90% of these certified stocks being held in Europe at a total of 1,590,210 bags and the remaining 5.10% being held in the USA at a total 85,661 bags. There was meanwhile a smaller in number 7,685 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 99,029 bags.
The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 13,667 bags over the weeks of trade leading up to Monday 8th. February, to see these stocks registered at 2,389,500 bags, on the day.
It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking firm something of a sideways track for the day. The Sugar, Cocoa and London Robusta Coffee markets ended the day on a positive note, while the New York Arabica Coffee Market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 1.30% higher; to see this index registered 486.69. The day starts with the U.S. Dollar, trading at 1.382 Sterling, at 1.213 the Euro and with the US Dollar buying 5.378 Real.
The New York and London markets started the day yesterday trading on a modest firmer note, both markets continued to trade around par for the remainder of the morning session. As the afternoon progressed the New York and London markets attracted a degree of buying support to see the markets trend firmer and hit a ceiling for the day before dropping back from the highs of the day. The New York market fell back late in the day to trade in negative territory before recovering to a degree in the late afternoon session to see the market settle on a softer note for the day. The London market followed suit in a more sedate manner to see the market settle on a modest firmer note for the day.
The London market ended the day on a modest positive note with 58.33% of the earlier gains of the day intact, while the New York market ended the day on a likewise modest negative note with 71.88% of the earlier losses of the day intact. This mixed close, does little to indicate direction nor does it inspire confidence and one might think that the markets are due for little better than a hesitant start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.
MAR 1342 + 7 MAR 122.95 – 1.15
MAY 1365 + 9 MAY 125.00 – 1.25
JUL 1380 + 9 JUL 126.95 – 1.20
SEP 1395 + 9 SEP 128.80 – 1.20
NOV 1412 + 10 DEC 130.85 – 1.15
JAN 1427 + 10 MAR 132.50 – 1.10
MAR 1444 + 10 MAY 133.25 – 1.00
MAY 1460 + 11 JUL 133.70 – 1.05