02 Sep 2020
The International Coffee Organisation ICO have reported that the global coffee exports for the month of July were 11% lower than the same month last year, at a total of 10.61 million bags. This, according to their report, illustrates the consequent effects of covid-19 related lockdowns impacting supply chains through challenging logistics over these months with many producer countries still in the throes of lockdown restrictions, in contrast to many northern hemisphere consumer markets where covid-19 related lockdown regulations are easing.

This lower export figure reported in the month of July, has contributed to the cumulative global coffee exports for the first ten months of the present October 2019 to September 2020 coffee year to be 5.30% lower than the same period in the previous coffee year, at a total of 106.59 million bags.

The International Coffee Organisation ICO have also come forth with their latest report to revise their forecast for global supply and demand signals, to report that against a global coffee supply of 169.34 million bags for the present October 2019 to September 2020 coffee year, they now estimate global coffee consumption to be approximately 168.39 million bags. This would push the global coffee markets into a narrow surplus supply, which the ICO estimate to be 952,000 bags for the present coffee year. The ICO have reviewed their estimate to push supply upwards, from an earlier in the year forecast which was put at 168 million bags, the upward revision mostly assigned to an increase in the Brazil estimate for their 2019/2020 crop year which has been reported at 58 million bags. This adjustment reviews their earlier estimate to see their forecast pendulum from a 486,000 bags deficit projected earlier in August.

The November to December contract arbitrage between the London and New York markets broadened yesterday; to register this at 65.04 usc/Lb. This equates to 49.50% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,924 bags yesterday to register these stocks at 1,231,742 bags, with 93.9% of these certified stocks being held in Europe at a total of 1,156,246 bags and the remaining 6.1% being held in the USA at a total of 75,496 bags. There is meanwhile a smaller in number increase by 1,649 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 5,564 bags.

The Certified Robusta coffee stocks held against the London exchange have been reported to increase by 11,500 bags over the weeks of trade leading up to Monday 31st. August, to see these stocks registered at 1,829,500 bags, on the day.

It was a firmer day overall on the commodity markets yesterday, to see the overall macro commodity index taking something of a positive sideways track for the day. The Cocoa and New York Arabica Coffee markets ended the day on a positive note, while the Sugar market ended the day on a softer note. The Reuters Equal Weight Continuous Commodity Index that is related to 17 markets is 0.6121% higher; to see this index registered at 418.9478. The day starts with the U.S. Dollar steady, trading at 1.337 to Sterling, at 1.190 to the Euro and with the US Dollar buying 5.399 Brazilian Real.

The New York and London markets started the day yesterday trading a positive note, the markets continued on this upward path for much of the morning trade before starting to attract a small degree of selling pressure. As the afternoon progressed both the London and New York market under some degree of selling pressure dropped back before gaining support to see the markets close on a positive note for the day.

The London market ended the day yesterday on a positive note and with 80.95% of the earlier gains of the day intact, while the New York market ended the day yesterday on a likewise positive note and with 64.38% of the earlier gains of the day intact. This firmer close might inspire some degree of confidence which is likely to set the markets for a near to steady start for early trade today, against the prices set yesterday, as follows:

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

SEP 1554 + 32 SEP 131.90 + 2.10
NOV 1463 + 34 DEC 131.40 + 2.35
JAN 1471 + 35 MAR 131.75 + 1.95
MAR 1483 + 35 MAY 132.65 + 1.85
MAY 1496 + 34 JUL 133.45 + 1.85
JUL 1510 + 35 SEP 134.10 + 1.95
SEP 1522 + 35 DEC 134.90 + 1.90
NOV 1535 + 34 MAR 135.70 + 1.80