Coffee Market Report

13 Jan 2022 | News

The National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the month of December was 358,000 bags or 20.54% lower than the same month last year, at a total of 1,385,000 bags.   This has contributed to the country’s cumulative coffee exports for the first three months of the present October 2021 to September 2022 coffee year to be 817,000 bags or 18.80% lower than the same period in the previous coffee year, at a total of 3,528,000 bags. 

The National Coffee Growers Federation in Colombia have also reported that the country’s coffee exports for the month of December were 129,000 bags or 9.85% lower than the same month last year, at a total of 1,180,000 bags.   This has contributed to the country’s cumulative coffee exports for the first three months of the present October 2021 to September 2022 coffee year to be 323,000 bags or 8.92% lower than the same period in the previous coffee year, at a total of 3,298,000 bags. 

With the 2021 calendar year complete, the National Coffee Growers Federation in Colombia have reported that the country’s coffee production for the 2021 calendar year was 1,300,000 bags or 9.35% lower than the previous year, at a total of 12,600,000 bags. The report has referenced the civil unrest and protests that took place between May and June as a contributing factor to the decline in coffee production. 

The March 2022 to March 2022 contract arbitrage between the London and New York markets widened yesterday to register this 137.34 usc/Lb. This equates to 57.02% 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 decrease by 26,799 bags yesterday, to register these stocks at 1,432,556, with 95.74% of these certified stocks being held in Europe at a total of 1,371,540 bags and the remaining 4.26% being held in the USA at a total 61,016.  Of this, a total 647,056 bags, or 45.17% of the coffees registered and stored in consumer country certified warehouses of the exchange, Brazil washed arabica, and a further 47.39% of these certified coffees, originating from Honduras.  There was meanwhile no change to the number of bags pending grading to the exchange; to register 8,195 bags pending grading on the day.

It was a firmer day on the commodity markets yesterday, as newly released US inflation data for 2021 posted its largest annual increase in close to 40 years. This news pressured the US Dollar to see the greenback lose ground against a basket of other currencies yesterday, buoying commodities as a whole. The Sugar, Coffee, Corn, Soybean, Gold, Silver and Platinum markets ended the day on a firmer note, while the Cocoa, Wheat and Palladium markets ended the day on a negative note.  The day starts with the U.S. Dollar trading at 1.372 Sterling, at 1.144 the Euro and with the US Dollar buying 5.534 Brazil Real.   

The New York market started the day yesterday trading on a near to par steady note, while the London market started the day yesterday trading on a near to par modest softer note, with both markets were seen to gain momentum during the early morning session, trending in a firmer direction.   The New York market was seen to attract a degree of buying support in a technical rally as the USA opened for their trading day, the London market followed suit on a more gradual track. As the afternoon progressed the upward trajectory in New York, appeared to have hit a technical ceiling, with selling activity gaining momentum, limiting further gains through the session.   The markets took a lower track from the highs attained earlier in day and the latter session saw further upward attempts, met by measured selling activity waiting above the market. Both the New York and London markets continued to carry through some degree of momentum and the markets settled on a firm note at the close. 

The London market ended the day on a positive note and with 46.67% of the gains of the day intact, while the New York market ended the day on a likewise positive note and with 48.41% of the gains of the day intact. This follow through firmer close, albeit that the markets dropped back from the highs of the day, might inspire some degree of confidence to possibly set the markets for a steady start to early trade today against the prices set yesterday, as follows:        

   

LONDON ROBUSTA US$/MT                     NEW YORK USC/LB.                                                                                                                     

MAR      2282 + 14                                              MAR      240.85 + 3.80

MAY      2233 + 17                                             MAY       240.65 + 3.65

JUL        2221 + 17                                              JUL        239.75 + 3.35

SEP       2216 + 17                                              SEP        238.80 + 3.10

NOV       2212 + 15                                                 DEC       237.20 + 2.90

JAN       2209 + 15                                               MAR      236.35 + 2.80

MAR      2202 + 15                                                MAY      235.55 + 2.70

MAY      2195 + 15                                   JUL      234.25 + 2.40