The Brazil government have reported that the country’s coffee exports for the month of October were 431,750 bags or 12.99% higher than the same month last year, at a total of 3,756,300 bags. The increase in reported exports for this month due to the larger biennial bearing production in 2020 coffee year, to similarly reflect the increased exports of Conilon robusta, to consumer markets over the same month compared to the previous year.
The International Coffee Organisation ICO have reported that the global coffee exports for the month of September were 0.86% higher than the same month last year, at a total of 10.16 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, and so too, many northern hemisphere consumer markets where covid-19 related lockdowns shift back into stricter regulations.
This marginally higher export figure reported in the month of September, has contributed to the cumulative global coffee exports for the October 2019 to September 2020 coffee year to be 4.91% lower than the same period in the previous coffee year, at a total of 126.90 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 168.84 million bags for the present October 2019 to September 2020 coffee year, they now have released a revised lower estimate for global coffee consumption to be approximately 167.59 million bags. This would push the global coffee markets into a narrow surplus supply, which the ICO estimate to be 1.24 million bags for the October 2019 to September 2020 coffee year. The ICO have reviewed their estimate to push consumption downwards, from an earlier in the year forecast which was put at 168.39 million bags, while there was a surge in demand at the start of the pandemic from panic buying and stockpiling, consumption has been to seen to slow down toward the end of the October 2019 to September 2020 coffee year due to ongoing pressure from a global economic slump and limited recovery in out of home coffee consumption, which is likely to be extended into the new October 2020 to September 2021 coffee year, as many northern hemisphere consumer countries lockdown once again, in reaction to the once again rising, rate of Covid-19 infections.
This year has meanwhile, presented an active year on the weather front, for tropical storms and hurricanes, with the latest of these, Hurricane Eta, has made landfall on the Nicaraguan coastline, bringing heavy rains and high winds. The storm has already weakened to a category 2 hurricane though is expected to bring with it heavy flooding as this weather moves further inland over northern Nicaragua, toward Honduras through Thursday. Concerns have been raised that heavy rains and strong winds could negatively impact infrastructure, and with it a degree of coffee crop loss, as these countries have already started to harvest in lower lying areas. The sustained strength of this latest hurricane as it moves over Central America and the impact that this could have on the coffee crop that is due to begin harvest very soon, will be closely monitored as Eta moves further inland.
The December 2020 to January 2021 contract arbitrage between the New York and London markets narrowed yesterday: to register this at 43.26 usc/Lb. This equates to 41.82% price discount for the London Robusta coffee market.
The Certified washed Arabica coffee stocks held against the New York exchange was seen to remain unchanged yesterday, to register these stocks at 1,152,585 bags, with 94% of these certified stocks being held in Europe at a total of 1,083,100 bags and the remaining 6% being held in the USA at a total 69,485 bags. There was meanwhile a larger in number 5,763 bags increase to the number of bags pending grading for this exchange; to register these pending grading stocks at 70,744 bags."