Coffee Market Report

by | 21 Oct 2020

The Ugandan Coffee Development Authority UCDA have reported that their country’s coffee exports for the month of September were 144,251 bags or 39.82% higher than the same month last year, at a total of 506,470 bags.   When delving into comparisons of coffee type exported in September this year, Uganda Robusta exports registered a remarkable 43.30% increase in exports when compared to the same month last year, to total 445,461 bags, whereas Arabica exports registered a decrease by 18.79% to a total 61,009 bags exported in September this year. 

This has contributed to the country’s cumulative coffee exports for the October 2019 to September 2020 coffee year to have been 921,051 bags or 20.75% higher than the same period in the previous coffee year, at a total of 5,360,859 bags. Uganda Robusta exports registered a 26.61% increase when compared to the previous October 2018 to September 2019 coffee year, to total 4,395,683 bags, while Arabica exports registered a marginal 0.29% decrease when compared to the previous coffee year, to total 965,176 bags. 

The December 2020 to January 2021 contract arbitrage between the New York and London markets narrowed yesterday; to register this at 46.43 usc/Lb.  This equates to 44.26% price discount for the London Robusta coffee market.      

The Certified washed Arabica coffee stocks held against the New York exchange was seen to increase by 3,975 bags yesterday, to register these stocks at 1,123,898 bags, with 93.70% of these certified stocks being held in Europe at a total of 1,053,588 bags and the remaining 6.30% being held in the USA at a total 70,310 bags.  There was meanwhile a larger in number 7,360 bags decrease to the number of bags pending grading for this exchange; to register these pending grading stocks at 42,278 bags.  

The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 86,500 bags over the weeks of trade leading up to Monday 19th. October, to see these stocks registered at 1,890,500 bags, on the day.

It was a modest soft day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a sideways track for the day. The Sugar, Cocoa and Coffee markets ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.2979% higher; to see this index registered at 421.5289.   The day starts with the U.S. Dollar steady, trading at 1.298 Sterling, at 1.185 the Euro and with the US Dollar buying 5.605 Brazilian Real.

The New York market started the day yesterday trading on a modest soft note, while the London market started the day yesterday trading on a modest positive note, both markets continued to oscillate around par for most of the morning session. As the afternoon progressed the selling volume increased and both markets came under a degree of pressure, to see the markets trend lower for the day, with both the London and the New York markets hitting a price floor to recover marginally from the lows of the day and the markets settle on a softer note for the day.

The London market ended the day with on a negative note with 80% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note with 56.10% of the earlier losses of the day intact. The soft and lacklustre close does little to indicate direction nor inspire confidence and one might think the markets are due for little better than a hesitant steady start to early trade today, against the prices set yesterday, as follows:  

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

NOV   1265 – 15                                                                DEC   104.90 – 1.15 

JAN    1289 – 16                                                               MAR   107.80 – 1.15

MAR   1298 – 13                                                                MAY  109.45 – 1.05

MAY   1311 – 14                                                                 JUL     110.90 – 0.95

JUL     1328 – 14                                                                 SEP    112.20 – 0.85

SEP    1345 – 14                                                                 DEC   113.85 – 0.95

NOV   1362 – 14                                                                 MAR   115.45 – 1.00

JAN    1378 – 14                                                                  MAY   116.50 – 1.00