Coffee Market Report

by | 03 Sep 2021

The International Coffee Organisation ICO have reported that the global coffee exports for the month of July were 1.34% higher than the same month in the previous year, at a total of 10.61 million bags.  This they say, has contributed to the cumulative global coffee exports for the first ten months of the October 2020 to September 2021 coffee year to be 2.15% higher than the same period in the previous year, at a total of 108.92 million bags. The cumulative increase in exports over the ten-month period, fuelled by Brazil which contributed 34.18% of the total exports to consumer markets. 

The Brazil government have reported meanwhile that the country’s green coffee exports for the month of August were 311,667 bags or 9.78% lower than the same month last year, at a total of 2,873,733 bags. The official breakdown of coffee exports by description for August will soon be released and can be anticipated to illustrate this figure more accurately.

The National Coffee Institute of Honduras (IHCAFE) have reported preliminary data shows that the country’s coffee exports for the month of August were 145% higher than the same month last year, at a total of 450,424 bags. This large increase likely to be reflected by the past year’s lockdown affected export figures reported at the same time last year.  This months’ export figures reported, would see the cumulative coffee export figures for Honduras for the first eleven months of the current October 2020 to September 2021 coffee year to be 5.60% higher than the same period in the previous year, at a total of 5,737,186 bags. 

The National Coffee Institute of Costa Rica (ICAFE) have reported that the country’s coffee exports for the month of August were 0.50% lower than the same month last year, at a total of 97,881 bags. This they say has contributed to the cumulative coffee exports for the first eleven months of the current October 2020 to September 2021 coffee year to be 0.70% higher than the same period in the previous coffee year, at a total of 1,086,584 bags. 

The November-to-December contract arbitrage between the London and New York markets narrowed yesterday to register this at 101.09 usc/Lb. This equates to 52.01% price discount for the London Robusta coffee market.  This wide arbitrage will likely be viewed by price sensitive roasters as an attractive alternative discount for robusta against the comparatively higher value arabica coffee.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday, to register these stocks at 2,165,261 bags, with 94.22% of these certified stocks being held in Europe at a total of 2,040,127 bags and the remaining 5.78% being held in the USA at a total 125,134 bags.  Of this, a total 1,151,885 bags, or 53.20% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 39.29% of these certified coffees, originating from Honduras.  There was meanwhile no change to the number of bags pending grading to the exchange; to register these pending grading stocks at 4,078 bags. 

It was a mixed day on the commodity markets yesterday, as investors await key US economic labour data to be released today, that could influence the Federal Reserve’s decision on monetary policy support.   The Sugar, Cocoa, Soybean, Corn and Wheat markets ended the day on a positive note, while the Coffee, Gold, Silver Platinum and Palladium markets ended the day on a softer note.  The day starts with the U.S. Dollar trading at 1.383 Sterling, at 1.186 the Euro and with the US Dollar buying 5.183 Brazil Real.   

The New York market started the day yesterday trading on a modest softer note while the London market started the day yesterday trading on a modest close to par firmer note. The markets continued to oscillate around par before slipping back to trend on a softer path for the remainder of the morning session, the markets started to attract a brief degree of buying support late in the morning session to see the markets recover slightly and trend firmer.  The markets hesitantly traded south of par before coming under selling pressure during the early afternoon session, pressured by long liquidation selling to accentuate the losses for the day’s trade. The markets rebounded from the lows of the day to recover some of the earlier in the day losses, to see both the New York and London markets settle on a negative note at the close. 

The London market ended the day on a modest negative note and with 31.25% of the losses of the day intact, while the New York market ended the day on a likewise negative note and with 49.06% of the losses of the day intact. This softer close does little to inspire to indicate direction, nor does this 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 USC/LB.                                                                                          

NOV     2056 – 10                                                DEC     194.35 – 1.30

JAN      2021 – 7                                                 MAR     197.05 – 1.20

MAR    1971 – 8                                                 MAY     198.00 – 1.25

MAY     1955 – 5                                                   JUL      198.50 – 1.30

JUL      1950 – 4                                                  SEP     198.95 – 1.30

SEP      1948 – 5                                                  DEC     199.60 – 1.25

NOV     1950 – 6                                                  MAR    200.10 – 1.20

JAN     1960 – 6                                                  MAY     200.45 – 1.15