June 12 2019
The Indonesian government trade data from Sumatra which is the leading coffee producing island within Indonesia, has reported that the islands robusta coffee exports for the month of May were 32,182 bags or 24.47% lower than the same month last year, at a total of 99,345 bags. This contributes to the islands cumulative robusta coffee exports for the first eight months of the present October 2018 to September 2019 coffee year to be 15,001 bags or 1.3% higher than the same period in the previous coffee year, at a total of 1,170,665 bags.
There remains for the present price resistance on the part of the farmers for their new crop robusta coffees, which are in harvest and this is likely with the resulting hardening of the asking price export differentials to the reference prices of the London market, is likely to continue to retard export volumes. Fortunately for the farmers, the country has a vibrant and less price sensitive domestic coffee market, which one would speculate can for the short term, offer some more profitable prices for their rising new crop coffee stocks.
The Vietnam Customs Authorities have reported that the countries coffee exports of mostly robusta coffees for the month of May were 8.31% higher than the earlier government forecast, to record coffee exports for the month at 2,437,000 bags. This they state, has resulted in the countries cumulative coffee exports for the first five months of this year to be 11.8% lower than the same period last year, at a total of 12,962,633 bags.
All indications are that due to internal market price resistance, that there still remain good volumes of coffee stocks being held by farmers and internal traders. This one might expect, following the countries last crop that was estimated to well exceed 29 million bags and with no problems foreseen for prospects of another large crop to start being harvested in October this year, to result in good volumes of coffee being available for export during the third quarter of this year.
With the coffee terminal markets once more on a downside track, there remains internal market price resistance within the producer bloc of Mexico and Central America and within the Colombia and now with the new crop in Peru being harvested, it is likewise the case within this fine washed arabica coffee producer. But with still reasonable stock levels within the main consumer markets and good volumes of Brazil coffees coming to the markets, this factor of price resistance is really only slowing physical coffee selling activity and one might expect to see significant volumes of washed arabica coffees hanging over the market for the third quarter of the year.
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